Unemployment Armageddon
By Devin Zugic
Twitter: @DevinTrader
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Last week’s unemployment weekly claim jumped to 3.28 million Americans, a record number by a very large margin. That number is staggering when the previous week’s number was 282,000. According to the Bureau of Labor Statistics the state of the economy as of February 2020, we had 164.5 million people working with a 3.5% unemployment rate. The previous high jobless number was recorded in October of 1982 with 695,000 filing for relief.
Unfortunately this week’s jobless claims will be another recording setting number. The social distancing measures put in place are causing many businesses to lose sales and revenue, which will eventually lead to solvency and liquidity problems. That is why businesses are hemorrhaging cash and cutting costs wherever possible. Here at Pineapple we are estimating about 10 to 12 million jobless claims coming in tomorrow April 2, 2020. The St. Louis Fed, Charles Gascon, estimated that 66.8 million people are employed in areas of the job market that are at high risk for being laid off. In addition, the social distancing extension to April 30 does not help those high risk individuals. Starting with last week’s number of 3.28 million, the US would have to average 12 million claims per week to hit the 66.8 million estimated total number by April 30. Goldman Sachs is predicting 5.5 million weekly claims this week, while J.P. Morgan has a 3.5 million estimated number. There will be plenty of volatility ahead if we actually reach those estimated numbers, so this upcoming earnings season will be historic. Let Pineapple help guide you through these unprecedented times.
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Source St. Louis Fed