The first 2 months of the year, the job data was so good that my forecast for job estimates for 2020 was too pessimistic as I was looking for job growth to fall between 98,000- 124,000 per month. The first 2-month average was running at 244,500, one of the better 2-month averages in the past few years.
As we can see with the global pandemic virus and lockdown protocols, monthly data lags a lot. Today job losses came in at 701,000, which clearly doesn’t tell the story as the next jobs report could lose over 15,000,000 in one report.
Jobless claims are running at a total of roughly 10,000,000 in the last 3 weeks. March 12th was the recent positive jobless claims data running near all-time lows. This shows the velocity of lockdown protocols with the jobless claims data. March 12th is when I would mark the date the recession started. That was the first date the government lockdown protocols here in the U.S. were announced for events gathering of 50 people and more. We had many cancelations of events happening the days before this as well but it didn’t impact the March 12th jobless claims data. After that, we can see the parabolic spike in the data.
More on that topic here where I show how 46% of all jobs are at risk due to the virus, but in context, the government’s disaster relief package will assist in keeping as many people on a company’s payroll.
AD Data 6,648,000 Jobless Claims
“Total nonfarm payroll employment fell by 701,000 in March, and the unemployment rate rose to 4.4 percent, the U.S. Bureau of Labor Statistics reported today. The changes in these measures reflect the effects of the coronavirus (COVID-19) and efforts to contain it. Employment in leisure and hospitality fell by 459,000, mainly in food services and drinking places. Notable declines also occurred in health care and social assistance, professional and business services, retail trade, and construction.”
The U6 rate, which was near historic lows, has spiked up, but in reality, this data line can go north of 20% in the upcoming reports.
From Doug Short:
As I have been doing in most of my recent articles, I believe it’s instrumental in breaking the economic data into three categories as the velocity of the virus, and lockdown protocols put all of us that track data into a situation.
BC (Before Coronavirus) data solid
AD ( After the Disease) Worst data ever with high velocity
AB ( America is Back) Lockdown protocols are taken off, tracking weekly info closely
Even though the Federal Reserve and the U.S. government has provided 6 trillion dollars in relief and most likely more incoming. These operations are more for keeping as many people and companies as solvent as possible until we defeat this virus. The economy itself can’t operate in any regular capacity as long as lockdown protocols are in place.
I still believe that by May 18th or earlier, we will have better data on the curve of the virus. However, we have a lot of work to do as a country together to defeat this virus and move forward. Make no mistake as a country; we are going to put up one hell of a fight against Covid19, and in time we will win. A lot of Americans are going to die, lose their jobs, and have a lot of stress. This is where we need to come together, one nation, one family, one goal. Help where you can and realize in time this will pass.
Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his Facebook page https://www.facebook.com/Logan.Mohtashami and is a contributor for HousingWire.