Jobless Claims: Huge Increase As Virus Impact Hits

Bottom Line: Initial jobless claims jumped sharply as the impact of the Covid-19 coronavirus hit labor markets. The BLS noted: “A number of states specifically cited COVID-19 related layoffs, while many states reported increased layoffs in service-related industries broadly and in the accommodation and food services industries specifically, as well as in the transportation and warehousing industry, whether COVID-19 was identified directly or not.” Claims jumped nearly 15k in Calfornia amid shelter-in-place orders in the San Francisco Bay Area and state-wide closures of bars and restaurants. Washington saw an increase of over 8k, more than doubling its average week. Nevada saw a 200% increase in claims as Las Vegas closed casinos. This is likely just the beginning of a massive rise in jobless claims nationwide. The leisure and hospitality sector, devastated by the virus, is typically the swing factor in labor markets and has turned negative in a historically unprecedented manner. Jobless Claims ROSE by 70k during the week ended March 14th to 281k, compared with market expectations for an increase to 220k.The 4-week average ROSE by 17.5k to 232k and the 13 week average ROSE by 3.5k to 219k. Continuing Claims ROSE by 2k during the week ended March 7th to 1,701k, after the prior week was revised slightly lower from 1,726k to 1,699k.The 4-week average FELL by 8k to 1,714k. On a non-seasonally adjusted basis, Continuing Claims FELL by 81k to 1,977k during the week ended February 29th. The Insured Jobless Rate STAYED at 1.2% during the week ended March 7th. The insured jobless rate only reflects the number of people collecting regular state unemployment insurance.