A week ago, I wrote that coronavirus broke the jobless claims chart when initial claims came in at 3,283,000. That initial estimate was just adjusted upward by 24,000 to 3,307,000. In normal times, an adjustment of 24,000 would be concerning news. But, these are not normal times:
That’s not a typo - jobless claims came in at 6,648,00. Wow. That easily beat the general consensus pre-release estimate, which was around three million.
It also ruined the initial claims chart even more than before! At least in the last version there was still a little bit of relationship to see between business cycles and claims. Now, it looks almost like a straight line.
Prior to the coronavirus, the historical record was 695,000 claims. This means that last week’s release beat that record by almost five fold. And now, this week is almost ten times as bad as the historical record. Think about how bad recessions are and think about ten times that. Scary stuff.
The hope is that this recession will be quick and therefore, while sharp, will be more of a shock and then quickly taper off. Every day the outbreak continues reduces the chances of that happening. We can all do our part to take care of the economy by taking care of our health. Save a life. Save a job. Stay home.