Saying that the jobless claims data from March 12th to April 9th is historic is 100% warranted. On March 12, 2020, jobless claims were still near historically low levels and headed lower on a week to week basis. What happened the next 4 weeks after that is something for the financial record books as shutdown protocols are working in creating social distancing.
From the Department of Labor: https://www.dol.gov/ui/data.pdf
In the week ending April 4, the advance figure for seasonally adjusted initial claims was 6,606,000, a decrease of 261,000 from the previous week’s revised level. The previous week’s level was revised up by 219,000 from 6,648,000 to 6,867,000. The 4-week moving average was 4,265,500, an increase of 1,598,750 from the previous week’s revised average. The previous week’s average was revised up by 54,750 from 2,612,000 to 2,666,750.
As you can see below vs. the Great Recession, these last 4 weeks make that recession look like a Carebear show. On a historical basis, the velocity of these last 4 weeks amounts to the 100-year flood.
Now what you ask?
These are dark times. But even in dark times, we are preternaturally prepared to see the end of the tunnel. We learned in the human physiology class that the photoreceptors of the human eye can detect a single photon of light. While it may not be until nine or more photos hit the retina that we perceived light, we detect before we can perceive. Likewise, if we are diligent, we will be able to identify the return of hope and light coming back into the American economy before it is perceived by all those poor masked souls around us.
For HousingWire, I wrote this week 5 things we really want to see to know that the economy is genuinely headed from the AD ( After The Disease) stage into the AB (America is Back) Stage.
One last point on wages.
Because enhanced jobless benefits, social security, and direct government payments will be distributed to many of those adversely affected by the shutdown, many households should not feel significant depressionary wage losses, especially those who are making $46,020 and below. I believe the months of April and May are going to tell an epic story of America’s start in defeating this virus. If we do this right and document the cause and effect of our efforts, future generations will be able to look to this period in time for how to handle a global pandemic in the future.
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.