U.S. initial jobless claims surge to a new record at 6648K

U.S. initial jobless claims surge again at 6648K vs 3700K estimate for the week ending March 28. This is a new unfortunate record. A bad figure was anticipated, as a large number of Americans were unable to fill unemployment claims in the previous week due to high demand and as the impact of the COVID-19 is becoming more visible. But this is worse than anyone could have ever imagined. To put into context how large these figures are: 1) the previous week, jobless claims peaked at 3283K, which was already in the high range estimate; 2) before that, the record high was set at 695K in 1982 when the United States went through recession due to the Fed’s contractionary monetary policy. The current level of unemployment claims in California (878K) alone surpass the record of 1982.

In the below chart, we see the evolution in America’s four largest economies (California, New York, Texas, Florida) which represent one third of US GDP. Total jobless claims skyrocket at 1747K. The sharp jump in jobless claims in California, which was one of the first major states to order all residents to stay home, certainly gives an idea of what is coming next in other states that implemented containment measures at a later stage. A wave of much uglier labor market data is about to start.