Passa ai contenuti principali

2.5 Million Initial Jobless Claims Tomorrow?

Last week's initial claims print, which surged to 281K from a recent baseline of about 220K, while bad was nowhere near the apocalyptic prints some strategists had predicted in light of the massive closures of restaurants, retailers, lodgings, and virtually all other service establishments which have shuttered for the duration of the coronavirus pandemic.

Indeed, many now think that last week's print was "low" only because the real hit was deferred to tomorrow due to processing delays and other logistical issues (countless labor department websites are only sporadically online amid the surge in traffic).

And while looking at tomorrow's initial claims report reveals a historic surge in Wall Street expectations, with consensus now expecting up to 750K newly laid-off workers seeking benefits, according to Southbay, historically one of the most accurate labor market forecasters, tomorrow's print will be a whopper at no less than 2.5 million!

  • Prior Week Initial Claims (Actual): 281K

  • Current Week Claims Forecast (Consensus): 750K

  • Current Week Claims Forecast (SouthBay): 2,351K

Here is SouthBay Research answering the question "How many people have been laid off?"

Consider theme parks: Disneyland shut last week and they employ ~25K.  Disney World the same.

Or restaurants: There are 660K restaurants in the US.  Of which 300K+ are full service restaurants (FSR): wait staff, host staff, bussers, dishwashers.  According to the BLS, FSRs employ ~5.5M workers. 

Basically it's hard not to see 1M+ layoffs in dining & drinking establishments.  (Barely 8% of the total Food & Drinking labor base).  If each FSR lays off 1 waiter and 1 support staff, that alone is 600K.

Michigan reported 55k claims in the 1st 3 days of the week; that's 15x the normal week total.

SouthBay's Model

The SouthBay data shows a 66% y/y drop in hiring (-44% week-over-week), with the heaviest concentration in...restaurants.  In 2009, when Jobless Claims were surging at a comparable rate, they were running at  600K Initial Claims per week.  But we didn't have complete shutdowns then.

The number will be slightly lower than actual because of late filings and government processing (the scale will be more than can be handled).

And visually:

2.5 Million Initial Jobless Claims Tomorrow?

 is what the initial claims chart will look like if SouthBay is right.

Confirming that tomorrow will be a bloodbath, is the latest commentary from Larry Kudlow who just said on Fox News that the upcoming jobs report will show a "large increase" in unemployment claims.

"It's going to be a very big increase, everybody in the market knows that."

Of course, the question is how large.

Finally, if not this week, the next will certainly be a shocker, and here's why:

  • CA GOV: 1 MILLION IN STATE HAVE FILED JOBLESS CLAIMS THIS MONTH

Commenti

Posta un commento

Post popolari in questo blog

Fwd: The Looming Bank Collapse The U.S. financial system could be on the cusp of calamity. This time, we might not be able to save it.

After months  of living with the coronavirus pandemic, American citizens are well aware of the toll it has taken on the economy: broken supply chains, record unemployment, failing small businesses. All of these factors are serious and could mire the United States in a deep, prolonged recession. But there's another threat to the economy, too. It lurks on the balance sheets of the big banks, and it could be cataclysmic. Imagine if, in addition to all the uncertainty surrounding the pandemic, you woke up one morning to find that the financial sector had collapsed. You may think that such a crisis is unlikely, with memories of the 2008 crash still so fresh. But banks learned few lessons from that calamity, and new laws intended to keep them from taking on too much risk have failed to do so. As a result, we could be on the precipice of another crash, one different from 2008 less in kind than in degree. This one could be worse. John Lawrence: Inside the 2008 financial crash The financial
Posta un commento
Continua a leggere

3 Reasons Why Gold Will Outperform Equities And Bonds

3 Reasons Why Gold Will Outperform Equities And Bonds https://www.forbes.com/ 3 Reasons Why Gold Will Outperform Equities And Bonds For centuries, gold has played a major role in human history and has become interwoven into the financial fabric of society. Beyond its investment following, gold has become synonymous with wealth. Historically, gold's early use cases revolved around money – a form of "medium of exchange". After the second world war however, several countries and their respective currencies, started to shift away from the gold standard and migrated towards a fiat currency system. Today, gold remains largely a "Store of Value", and due to its unique properties and large number of use cases, it has managed to distance itself from other asset classes in terms of correlation, demand / supply drivers, and investment purpose. Gold's idiosyncrasies function as a double-edged sword, as it is challenging to predict
Posta un commento
Continua a leggere

What Will Stocks Do When “Consensual Hallucination” Ends?

The phenomenon works – until it doesn't. What's astonishing is how long it works. There is a phenomenon in stock markets, in bond markets, in housing markets, in cryptocurrency markets, and in other markets where people attempt to get rich. It's when everyone is pulling in the same direction, energetically hyping everything, willfully swallowing any propaganda or outright falsehood, and not just nibbling on it, but swallowing it hook, line, and sinker, and strenuously avoiding exposure to any fundamental reality. For only one reason: to make more money. People do it because it works. Trading algos are written to replicate it, because it works. It works on the simple principle: If everyone believes stocks will go up, no matter what the current price or the current situation, or current fundamental data, then stocks will go up. They will go up because there is a lot of buying pressure because everyone believes that everyone believes that prices will go up, and so they bid up
Posta un commento
Continua a leggere