Wondering how long you're going to see high jobless claims?
Steve Skancke, chief economic advisor at Keel Point, discusses whether or not we'll continue to high jobless claims numbers in the coming weeks, and he explains why he thinks the market moved up after the jobless claims data came in higher than expected Thursday.
Watch the full video above for more.
On Thursday, we got jobless claims of 3.28 million, which is the highest amount ever in history and we were only expecting about 1.5 million, which is still a really high number. So joining me to break it all down today is Steve Skancke, Chief Economic Advisor at Keel Point. Steve, you think that we should get jobless claims with about 2 million next week. Is there any end in sight for these millions? When can we expect this to drop off and go back into the hundreds of thousands?
Well, at some point it'll slow down Katherine, but right now, we're facing the catch up from all of the shelter in place rules that various cities and states have been imposing. The interesting thing about the 3.28 million number is that it probably underestimates the true size of the people making claims just because unemployment offices were overwhelmed and not even able to process or report up all of the claims that were being made.
Would you have expected this number to be bigger if we hadn't been so behind on, for the office's sake?
That seems to be the consensus. It was a wide range and as you pointed out, it ranged from one and a half million up to a four and a half million. So, somewhere between three and four million seems about right. We'll see how much of an upward revision we get when it reports next and how much of a catch up we see in the next month, I'm sorry, in the next week. So if we see another two million and a slight upward revision, that's probably about right in terms of dealing with the initial wave.
One question that I got a lot on Twitter this morning was actually, why did we see the market tick up when we got these claims that came in higher than expected? So I want to ask the expert here, why was that?
I think the market was probably expecting a whole lot worse than what it turned out to be. And that's not because there were ... A lot of forecasts were a really big number, but we're in a period where anything is almost unimaginable. When you think of 50, 60, 80, 100,000 coronavirus infections, and then you hear numbers about GDP down 12 to 20% in the second quarter, it's hard to put all that together and understand what it really means. So in some respects, the 3.28 million was a bit of a relief to the market in that it wasn't as scary as it might have been.
Steve, as always, thank you for joining and thank you for all of your insight and for more on the markets, head on over to the street.com.