The Dept. of Labor released weekly unemployment data showing an additional 2.1 million workers filed new unemployment compensation claims last week; bringing the total claims to over 40 million since the Wuhan virus mitigation effort shut down the U.S. economy.
However, there is some good news within the data. The “continuing claims”, meaning those who have been collecting unemployment compensation for at least two weeks, is now at 21 million. That’s a drop of almost four million from the prior week and signals that jobs are returning as the state economies begin reopening.
Additionally, the Bureau of Economic Analysis (BEA) released the second estimate of the first quarter Gross Domestic Product. The estimate moved the prior contraction of -4.8 percent slightly lower to a newly revised estimate of -5.0 percent.
With the first quarter at -5.0 percent (Jan, Feb, March) and a guaranteed much larger contraction in the second quarter (April, May, June) it is now a certainty we will officially be labeled “in a recession” when the Q2 numbers are released on the last Friday of July. The media is using the data lag to narrate, and drag-out discussion of negative economic news, as long as possible.
There are some indicators the rebound will be strong (home sales, housing starts, mortgage applications, consumer confidence) but the key to both a wide and deep recovery is putting people back to work as quickly as possible.
(CNBC) First-time claims for unemployment benefits totaled 2.1 million last week, the lowest total since the coronavirus crisis began though indicative that a historically high number of Americans remain separated from their jobs.
Economists surveyed by Dow Jones had been looking for 2.05 million. The total represented a decrease of 323,000 from the previous week’s upwardly revised 2.438 million. (read more)