This was the 7th straight week claims topped the 3 million mark.
The 7-week total is 33.476 million.
Employment Level
Note that 20 Years of Employment Gains Have Vanished
The above chart does not reflect the 3.169 million in today’s report.
ADP vs BLS
Yesterday, I commented ADP Reports 20 Million Jobs Lost: A Disaster Comparison Three Ways.
Unemployment Rate
Yesterday, the Chicago Fed addressed the question Is the Unemployment Rate a Good Measure of People Currently Out of Work?
The Chicago Fed projected a baseline unemployment rate of 9.4% with a U-6 rate of 18.9% and a COV-Underutilization Rate of 29%. T
he Cov rate is essentially the U-6 rate except that it makes additions for Cov-impacted workers.
I find 9.4% downright silly, but we find out tomorrow.
Upcoming Jobs Report: What Will the Unemployment Rate Be?
On April 30, and based on the 30 million claims, I asked Upcoming Jobs Report: What Will the Unemployment Rate Be?
I arrived at 21%. For comparison purposes, Bloomberg estimates 20%.
New Claims Impact?
Q: How does today’s number impact by 21% calculation?
A: It doesn’t. The BLS reference week methodology explains why.
Reference Week
The reference week for the BLS Household Survey unemployment report is the week that contains the 12th of the month.
For the April Jobs Report coming out Friday, May 8, the reference week was the 12th through the 20th.
Today’s 3.169 million claims are for the week April 26 through May 2.
Some of those will be laggards who were out of work during the reference week, but I suspect most will fall into the May unemployment report, not April’s.
That said, this 7th grim week suggests May will be another bad month.
The reference week for May is the 10th through the 16th.
If people return to work toward the end of this month, the May report mighty be on the high side vs reality.
Mish
Unemployment insurance and CARES act is the biggest scam goin ,what’s it like less than 20% receive benefits lol! 80% of applications get declined,why?Big gov is diverting those taxes for unemployment insurance to fund even more prison space,more prison construction and the offshoring of tax payments directly into politicians personal bank accounts in the Caymans or Zurich!
Seems like they should get the same Covid curve fitters to fit a curve to that data. No more claims by about May 10th…
Extend the curve, and watch the negative claims come rolling in!
“If people return to work toward the end of this month, the May report mighty be on the high side vs reality.”
…
Put me down for a second (and more) wave of layoffs in the coming months. As stimulus runs out / economy doesn’t bounce back as “experts” predict / delinquencies soar / new consumer habits … reality will intrude.
Yep…two 8 week periods that overlap by about 4-6 weeks. Growth in COVID positive cases as percentage of the population…US surpassed Italy on May 2nd. As a whole…not much change in the growth rate despite large degree of deviance amidst individual states.
Figure PPP launched April 3rd and re-launched April 27th. Banks have 10 days from acceptance to fund.
Anticipate COVID to take at least 2 weeks and likely 4 weeks or more to ramp up growth with re-opening in many states. Likely more delays and protests in shutting down again that will cause lag time.
Come September…gonna be fugly! imo fwiw
High unemployment claims not seeming to bother Mr. Market. everyone seems pretty relaxed.
Mr Market expects things to bounce back quickly. Kashkari this morning – this guy is SO running to be next Chairman of FRB – no Depression because of overwhelming fedgov response. Echoing Bernanke’s thoughts on Great Depression. Bernanke himself equated virus impact on economy to that of a “snowstorm”. By years end everything on the up and up.
In contrast today, JPM’s Chief Investment Officer expects 10 to 12 YEARS before pre virus employment reached again.
The Stock Market Is Not the Economy
What’s more, the two are drifting even further apart.
John Rekenthaler
May 4, 2020
Yep. Long ago I said Ben Bernanke’s first trick was to separate equities from economy … and his second would be separate equities from earnings.
Enjoy the 50 P/E …
Between the Fed and JPM, I would trust JPM more. Jamie Dimon is probably the smartest guy on Wall St, remember the time when pulled out of the mortgage market earlier than everyone else?
Venezuela had the best performing stockmarket since 2017.
The stock market is now nothing more than a casino rigged by the holders of tradable info for the benefit of people that can act on it without getting indicted (Congress and their families).
It’s a club, and you ain’t in it.
It’s gonna take a little while for the money at the ground level to percolate to the 1%, then to the 0.1%, then to the 0.01%.
The Fed can inflate any asset they want. Deflation is going to be impossible.
The first few weeks were $12/hr jobs with direct public exposure. Next were their suppliers and distributors. Coming are the manufacturing and industrial equipment jobs that make good money. How long can this go on?
The $600 / WEEK in added unemployment benefits (thru July 31st) to state benefits will crush many businesses.
Business supposed to sit around and twiddle thumbs until then as no way they can compete $$s wise?
Not actually. If you are called back to work or are offered a similar job through the unemployment office and you turn down the offer, for ANY reason, you lose all unemployment, including that extra $600.
“I arrived at 21%. For comparison purposes, Bloomberg estimates 20%.”
…
I watched Neel Kashkari this morning on The Today Show. He’ll be eating crow for much of what he said, but thought true UE around 23% or 24%. Thinks tomorrow’s number closer to 16% (or so) since ~ with stay at home in place – and you have to actively look for work – will be an under count.
Not sure about that Tony
If you are furloughed – not laid off then you have an expectation of returning to your job. In that case – I believe you do not have to look.
Most people were furloughed. I allowed for 4 million overages.
If you allow 8 million overages you get something like 18% – the bottom of my range.
I’m with you, not sure Kashkari correct, but that is what he said.
16% is at least an understandable estimate.
9.4% really?
But stranger things have happened, especially with the BLS involved and Trump giving orders.