Unemployment Claims Top 3 Million for 7th Straight Week

Mish

Initial claims for the week ending May 2 were 3.169 million.

This was the 7th straight week claims topped the 3 million mark. 

The 7-week total is 33.476 million.

Employment Level

Employment Level 2020-05-05

Note that 20 Years of Employment Gains Have Vanished

The above chart does not reflect the 3.169 million in today's report.

ADP vs BLS 

ADP vs BLS Employment 2020-04-05

Yesterday, I commented ADP Reports 20 Million Jobs Lost: A Disaster Comparison Three Ways.

Unemployment Rate

Yesterday, the Chicago Fed addressed the question Is the Unemployment Rate a Good Measure of People Currently Out of Work?

The Chicago Fed projected a baseline unemployment rate of 9.4% with a U-6 rate of 18.9% and a COV-Underutilization Rate of 29%. T

he Cov rate is essentially the U-6 rate except that it makes additions for Cov-impacted workers.

I find 9.4% downright silly, but we find out tomorrow.

Upcoming Jobs Report: What Will the Unemployment Rate Be?

On April 30, and based on the 30 million claims, I asked Upcoming Jobs Report: What Will the Unemployment Rate Be?

I arrived at 21%. For comparison purposes, Bloomberg estimates 20%.

New Claims Impact?

Q: How does today's number impact by 21% calculation?

A: It doesn't. The BLS reference week methodology explains why.

Reference Week

The reference week for the BLS Household Survey unemployment report is the week that contains the 12th of the month. 

For the April Jobs Report coming out Friday, May 8, the reference week was the 12th through the 20th.

Today's 3.169 million claims are for the week April 26 through May 2. 

Some of those will be laggards who were out of work during the reference week, but I suspect most will fall into the May unemployment report, not April's. 

That said, this 7th grim week suggests May will be another bad month. 

The reference week for May is the 10th through the 16th.

If people return to work toward the end of this month, the May report mighty be on the high side vs reality. 

Mish

Comments (20)
No. 1-6
Tony Bennett
Tony Bennett

"I arrived at 21%. For comparison purposes, Bloomberg estimates 20%."

...

I watched Neel Kashkari this morning on The Today Show. He'll be eating crow for much of what he said, but thought true UE around 23% or 24%. Thinks tomorrow's number closer to 16% (or so) since ~ with stay at home in place - and you have to actively look for work - will be an under count.

WildBull
WildBull

The first few weeks were $12/hr jobs with direct public exposure. Next were their suppliers and distributors. Coming are the manufacturing and industrial equipment jobs that make good money. How long can this go on?

Jojo
Jojo

High unemployment claims not seeming to bother Mr. Market. everyone seems pretty relaxed.

Tony Bennett
Tony Bennett

"If people return to work toward the end of this month, the May report mighty be on the high side vs reality."

...

Put me down for a second (and more) wave of layoffs in the coming months. As stimulus runs out / economy doesn't bounce back as "experts" predict / delinquencies soar / new consumer habits ... reality will intrude.

Corto
Corto

Seems like they should get the same Covid curve fitters to fit a curve to that data. No more claims by about May 10th...

lol
lol

Unemployment insurance and CARES act is the biggest scam goin ,what's it like less than 20% receive benefits lol! 80% of applications get declined,why?Big gov is diverting those taxes for unemployment insurance to fund even more prison space,more prison construction and the offshoring of tax payments directly into politicians personal bank accounts in the Caymans or Zurich!


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