Despite the hope-restoring nonfarm payrolls “recovery” and the over-hyped bounce in ‘soft’ sentiment surveys (which are biased by their nature as diffusion indices to bounce back hard), for the eighteenth week in a row, over 1 million Americans filed for unemployment benefits for the first time (1.416mm was notably worse than the 1.30mm expected).
Additionally, for the first time in 16 weeks, initial jobless claims reaccalerated…
That brings the eighteen-week total to 52.69 million, dramatically more than at any period in American history. However, as the chart above shows, the second derivative is slowing down drastically (even though the 1.416mm million rise this last week is still higher than any other week in history outside of the pandemic)
Virginia, California, and Louisiana led the resurgence in jobless claims as Florida, Texas, and Georgia saw declines…
Continuing Claims did drop again but hardly a signal that “re-opening” is accelerating! And definitely not confirming the payrolls or sentiment data…
And as we noted previously, what is most disturbing is that in the last eighteen weeks, far more than twice as many Americans have filed for unemployment than jobs gained during the last decade since the end of the Great Recession… (22.13 million gained in a decade, 52.693 million lost in 18 weeks)
Worse still, the final numbers will likely be worsened due to the bailout itself (and its fiscal cliff): as a reminder, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27, could contribute to new records being reached in coming weeks as it increases eligibility for jobless claims to self-employed and gig workers, extends the maximum number of weeks that one can receive benefits, and provides an additional $600 per week until July 31.
Finally, it is notable, we have lost 348 jobs for every confirmed US death from COVID-19 (143,193).
Was it worth it?
The big question remains – what happens when the $600 CARES Act bonuses stop flowing?