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Jobless Claims: Historic Jump As Economy Shuts Down

March 26, 2020

Bottom Line: Widely expected to notch a record increase amid shutdowns to prevent the spread of the Covid-19 coronavirus, initial jobless claims jumped by over 3 million. This far exceeded the previous high of 695k in October 1982. The Department of Labor noted:

“During the week ending March 21, the increase in initial claims are due to the impacts of the COVID-19 virus. Nearly every state providing comments cited the COVID-19 virus impacts. States continued to cite services industries broadly, particularly accommodation and food services. Additional industries heavily cited for the increases included the health care and social assistance, arts, entertainment, and recreation, transportation and
warehousing, and manufacturing industries.”

Advanced state-level details through March 21st show broad increases across the country. The increase in California was just over 100. New York was just over 60k, while Pennsylvania was over 360k. Against anecdotal and reports to the media from states directly, this suggests we could see another record increase of at least this much in the coming weeks. Reports suggest the California total, for instance, should be over a million, at least 8 times more than what was included in this report.

Jobless Claims ROSE by 3001k during the week ended March 21st to 3283k, compared with market expectations for an increase to 1700k. The 4-week average ROSE by 765.8k to 998k and the 13 week average ROSE by 235.8k to 454k.

Continuing Claims ROSE by 101k during the week ended March 14th to 1,803k, after the prior week was revised slightly lower from 1,726k to 1,702k.The 4-week average ROSE by 28k to 1,731k.

On a non-seasonally adjusted basis, Continuing Claims ROSE by 120k to 2,097k during the week ended March 7th.

The Insured Jobless Rate STAYED at 1.2% during the week ended March 14th. The insured jobless rate only reflects the number of people collecting regular state unemployment insurance.

Article by Contingent Macro Advisors