3.2 Million New Claims

Last weeks initial unemployment claims hit 3.2 million, which would have been an unprecedented record 7 weeks ago:

U.S. workers have filed nearly 33.5 million applications for unemployment benefits in the seven weeks since closures were put in place to combat the coronavirus pandemic, showing a wave of layoffs that likely pushed April job losses to record levels.

U.S. workers filed 3.2 million jobless claims last week, the Labor Department said. It was the fewest since the week ended March 14, before the pandemic caused claims to spike, but still fifteen-times early March readings.

Recent layoffs are expected to cause nonfarm payrolls to fall by 21.5 million and the unemployment rate to climb to 16% in the April jobs report, which will be released on Friday, according to economists surveyed by The Wall Street Journal. Both numbers would be highs on records back to the late 1930s and late ’40s. The previous peak unemployment rate was 10.8% in 1982. The largest monthly jobs loss, 1.96 million, occurred at the end of World War II.

The decline in payrolls is expected to show U.S. employers in one month cut all the jobs they added in the past decade. Combined with the rise in unemployment and the loss of jobs in March, Friday’s figures are expected to show the labor market’s sharp reversal since February, when joblessness was at a half-century low of 3.5% and the country notched a record 113 straight months of job creation. 

The article quotes experts saying that this indicates that maybe we are past the worst of this, but my assessment is that we are running out of people who can lose their jobs.

Tomorrow, we get the April unemployment numbers, or more accurately the unemployment rate as of April 15.

I'm going to put the unemployment rate at 15.8%, and it's likely to break 20% in the May numbers.

By way of perspective, if the jobs recovery happens at ten times that of the numbers following the Great Recession, it will take over 2 years to recover to where we were in February.

Not good.