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New Jobless Claims Sub-2 Million 1st Time in Months

Mark Vickery

Thursday, June 4, 2020

The ebbing of the catastrophic U.S. labor market continued steadily over the last week, with an Initial Jobless Claims headline coming in at 1.877 million. This is still a huge number for new unemployed Americans in one week, but has come down from the previous week’s 2.126 million, and well off the pace we saw in late March, when 6.87 million people in the U.S. filed new jobless claims.

Today’s figure is the first time we’ve been sub-2 million for the week since the week of March 15th, before the bottom of the labor market fell out on “shelter in place” measures taken to thwart the spread of COVID-19 coronavirus. Since this crisis began, more than 40 million people have lost their jobs in this country.

Continuing Claims reached 21.487 million from two weeks ago (this report comes a week in arrears), up from the previous week’s revised 20.838 million but down notably from the 24.912 million the week previous to that. California, Florida and Georgia reported the largest numbers of claims for the week, while New York and Texas — both still at highly elevated levels of joblessness — have come down in claims overall.

Tomorrow’s non-farm payroll report from the U.S. Bureau of Labor Statistics (BLS) is expected to show another jump on the Unemployment Rate, from an already all-time high 14.7% — far and away the biggest number in this survey’s 72-year history. Analysts are looking for roughly 8-9 million new job losses for May, with an Unemployment Rate around 20%. The good news, such as it is, could be that tomorrow’s report will represent the very lowest point of the crushed labor market.

The U.S. Trade Deficit for April fell deeper by $5 billion month over month to -$49.4 billion, which is the deepest hole since September 2019. A year ago, our deficit was routinely in the -$50 billions, marking a 5-year low in December 2018. Prior to this, the Great Recession of 2009 pushed the U.S. trade deficit to its lowest levels in history, where it spent several months sub-$60 billion.

Q1 Productivity was revised to 108 points, now -0.9% from Q4 totals from the -2.5% originally posted. These numbers are still plateauing at all-time highs. Meanwhile, Unit Labor Costs rose 5.1% — exactly in-line with consensus expectations, and higher than the 4.8% reported in the prior quarter.

Pre-market indexes have pared losses following these economic reports, but especially after an announcement from the European Central Bank (ECB) that the financial body will be expanding its bond purchases by EUR 600 million, through June 2021. Much the way the Fed has worked to flood the U.S. economy with capital in the wake of the current recessionary environment, ECB President Christine Lagarde appears to be following suit.

Mark Vickery
Senior Editor

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