US Unemployment Surges To Highest Since Great Depression

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    The US Labor Department reported the largest one-month…


    Helmholtz Watson

    White House advisor Kudlow:on Reports

    does not think contraction has fully run course
    US jobs report full of heartbreak, hardships
    reopening phase will be intimate, spill into June
    jobs numbers will continue to deteriorate
    appropriate policies can make roaring economy in 2021
    will see positive numbers and 2nd half of year
    providing for virus safety should be fully deductible
    having meetings with lawmakers of both parties
    Trump weighing making business expenditures to make changes for coronavirus safety tax deductible
    three quarters of today’s numbers are temporary layoffs
    people expect to go back to work

    Helmholtz Watson


    unemployment numbers are heartbreaking
    almost all unemployed expect to be re-hired by employer
    next report could show 25% unemployment
    payroll tax cut would only be a part of next package


    The Conference Board Employment Trends Index™ (ETI) Dropped Further in April Index declines further as job market deteriorates amid COVID-19

    CB Employment Trends Index (Apr)
    43.43 v 60.39 (Previous)

    The Conference Board Employment Trends Index™ (ETI) declined further in April, following a sharp decline in March. The index now stands at 43.43, down from 57.87 (a downward revision) in March. The index is down 60.2 percent from a year ago.

    “The Employment Trends Index plunged in March and April, with all components of the index moving far into negative territory,” said Gad Levanon, Head of The Conference Board Labor Markets Institute.

    “A decline in jobs of this magnitude is unprecedented. The principal objective of the economy going forward is to accommodate the delicate balance of getting people back to work while minimizing the spread of the virus. Millions of workers in businesses that were shut down will return to work over the coming months as states start to reopen their economies. However, for many companies, massive layoffs will continue in the coming months as they try to adjust to lost revenue with cost cuts. Beginning in May or June, we expect that the number of workers returning to work will be larger than the number being furloughed or laid off. This would mean the unemployment rate will start to decline. At the end of the year, however, the labor market may still be in worse condition than it was at the peak of the Great Recession.”

    April’s decrease was fueled by negative contributions from all eight components. From the largest negative contributor to the smallest, these were: the Ratio of Involuntarily Part-time to All Part-time Workers, the Number of Employees Hired by the Temporary-Help Industry, the Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Initial Claims for Unemployment Insurance, Industrial Production, Job Openings, Real Manufacturing and Trade Sales, and the Percentage of Firms With Positions Not Able to Fill Right Now.

    The Employment Trends Index aggregates eight labor-market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.

    The eight labor-market indicators aggregated into the Employment Trends Index include:

    Percentage of Respondents Who Say They Find “Jobs Hard to Get” (The Conference Board Consumer Confidence Survey®)
    Initial Claims for Unemployment Insurance (U.S. Department of Labor)
    Percentage of Firms With Positions Not Able to Fill Right Now (© National Federation of Independent Business Research Foundation)
    Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
    Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
    Job Openings (BLS)**
    Industrial Production (Federal Reserve Board)*
    Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)**

    *Statistical imputation for the recent month

    Helmholtz Watson

    US initial jobless claims 2981K v 2500K estimate

    Initial jobless claims 2981K versus 2500K estimate. Prior month revised 23176K from 3169K previously reported
    4 week moving average of initial jobless claims 3616.5 K versus 4180.5 K last week

    Continuing claims 22833K versus 25120K estimate. Prior week revised to 22377K versus 22647K estimate
    4 week moving average of continuing claims 19760K versus 17030.25K last week

    Lifted the total reported since March 21st to 36.5 million, equivalent to nearly a quarter of the working age population.

    Helmholtz Watson

    Federal Reserve Survey on Workers Who Lost Job Due TO Covid-19

    – 90% of workers who lost jobs were told they could return to their job
    financial circumstances change dramatically for people who face job cuts or reduced hours as a result of the coronavirus
    19% of all adults either lost job or experience reduction in hours
    39% of workers with household income below $40,000 reported a job loss in March
    23% of all adults said their income in March was lower than February
    workers who lost their jobs or were furloughed were told they could return to their job at some point
    it is difficult to predict how long layoffs will last
    63% of workers with bachelors degrees or more were able to work fully from home compared to 20% of workers with a high school degree or less
    81% of adults said they could pay their bills in full and April, down from 84% 4thQ
    64% of adults reporting job loss or reduction in hours expected to pay all April bills compared to 85% for those without employment change
    before the pandemic 25% of non-retired adults lacked retirement savings
    before crisis 30% of adults could not cover 3 months of expenses using savings or borrowings


    JOLTS job openings for March 2020 6191 vs. 5800 estimate, lowest level since May 2017

    Prior month was revised to 7004 vs. 6882 previously reported
    job opening rate 3.9% vs. 4.4% prior month
    pace of hiring 3.4% vs. 3.8% prior month
    2,782,000 people quit a job in March. Quit rate 1.8%
    separations at 9.6% March vs. 3.7% in February

    layoffs and discharges at 7.5% of March vs. 1.2% in February
    11,372,000 people were fired or laid off in March vs. 1,698,000 in March of last year
    an additional 363,000 people left their employer due to retirements, transfers to other locations, death, and separations due to disabilities

    However keep in mind that this data is for March 2020. We can expect sharper falls next month.

    Helmholtz Watson

    [b]Highest State unemployment rates in April:
    28.2% Nevada
    22.7% Michigan
    22.3% Hawaii
    17.0% Rhode Island
    16.9% Indiana
    16.8% Ohio
    16.4% Illinois
    16.3% New Hampshire
    15.6% Vermont
    15.5% California
    15.4% Kentucky
    15.4% Mississippi
    15.3% New Jersey

    14.7% U.S.

    Helmholtz Watson

    US initial jobless claims 2123 K v. 2100K estimate
    prior report revised slightly higher to 2446K v. 2438K previously reported
    four-week average 2608K vs. 3044K previously

    continuing claims 21052K vs. 25680K estimate. Prior month 24912K vs. 25073K estimate
    4 week moving average to 22722.25K vs. 21962K previously

    The total number of claims since mid-March now over 40.8 million.

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