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Building on my analysis from last week: 1. This week's 6.6M new jobless claims represents ~4% of the estimated ~160-165M US Workforce. 2. This is incremental

Building on my analysis from last week: 1. This week's 6.6M new jobless claims represents ~4% of the estimated ~160-165M US Workforce. 2. This is incremental to the 3.3M new jobless claims filed week ending 3/21, totaling ~10M total jobless claims in the past 2 weeks. 3. The US unemployment rate was ~3.5% as of EOM February [1], so cumulatively that means we've hit ~10% unemployment as of EOW 3/28 (~10M incremental jobless claims = ~6%). That number is likely low and continuing to increase, as new jobless claims do not account for gig workers and many state unemployment sites have been inundated by these claims resulting in site crashes and people unable to file claims. In addition, layoffs have almost certainly continued between 3/28 and today. 4. The consensus estimate for this week's jobless claims was ~3.76M jobless claims, and the 6.6M actual claims blow the consensus estimate out of the water. That said, some analysts such as Goldman Sachs had estimated ~5.5M joblesss claims. Goldman Sachs estimates that unemployment will peak at ~15%. [2] [1] https://data.bls.gov/timeseries/LNS14000000 https://data.bls.gov/timeseries/LNS14000000 [2] https://www.cnbc.com/2020/03/31/coronavirus-update-goldman-sees-15percent-jobless-rate-followed-by-record-rebound.html https://www.cnbc.com/2020/03/31/coronavirus-update-goldman-s...

treyfitty 6y ago
The forecasted unemployment rate is weird: economists are not forecasting a major increase for April 03s release. Do you happen to know why? https://tradingeconomics.com/united-states/unemployment-rate https://tradingeconomics.com/united-states/unemployment-rate
- itamarst 6y ago
  April unemployment is probably only measured mid-March, so it predates all these claims.
- hurricanetc 6y ago
  They do the monthly survey in the middle of the month. Most of the state shutdowns happened after the surveys were completed. Don’t ask me why they don’t just use the weekly numbers.
  - makomk 6y ago
    The weekly numbers are unemployment benefit claims, whereas I think the monthly employment statistics are based on surveying the population and counting the actual number of people who are employed, seeking work, etc.
    - hurricanetc 6y ago
      Yeah I understand the distinction but the weekly numbers capture much of the same information and are more accurate. The monthly survey is just something we do because we’ve done it for a long time.
  - TheCoelacanth 6y ago
    The weekly numbers are number of newly unemployed. The unemployment survey is measuring how many people are currently unemployed. The former is correlated with the rate of change in the latter, but is not the same thing.
airstrike 6y ago
I'm also hearing this morning that we've hit the 10% mark. I also heard the same economist say "The economy is collapsing, and it's a global collapse". I don't even need coffee to be alert the rest of the day...
- buzzkillington 6y ago
  And all this for a virus that kills around 1% of the people who get it, and the majority of them are retired. Future generations will look at us and wonder how we were this stupid.
  - AlexandrB 6y ago
    You should check the numbers coming out of Italy. It’s not 1% if the medical system is overwhelmed. Moreover, you do realize that’s 3 million dead in the US alone?
    - x0x0 6y ago
      It's universally true that the people eager to feed the olds (and a bunch of non-olds, too) into the wood chipper never seem to have their, and their parents', do-not-treat orders signed.
    - nostrebored 6y ago
      It's also not the reported number in Italy. The sources of error in the data are enough to make the data fairly meaningless. 1. We have no idea how many people were infected 2. We have no idea how many people who have died died from Covid 19 3. The population pyramid in Italy is extremely disparate from the rest of the world. The medical system being overwhelmed is a portion of the contribution, and what it means to be 'overwhelmed' is about as clear as what it means to have an error in your application. Are you overwhelmed due to lack of beds? Lack of ventilator access? Lack of doctors? What are the numbers for these in the remainder of the world? Treating any modeling we have of the impact of Covid 19 as reliable is an exercise in insanity. EDIT: To be clear this isn't to say that the responses are unwarranted. It's just to say that they are conservative and acting on knowingly incorrect information. If they were the right decisions remains to be seen. The impact of global financial collapse isn't just 'stocks down', but has tangible impacts on life expectancy, healthcare quality, and quality of life globally. Time will tell.
enraged_camel 6y ago
Goldman Sach may estimate the unemployment rate peaking at 15%, but the Fed said it could reach 32% by summer.
Spooky23 6y ago
Data released in New York alone is that they are getting 250-300k successful initial claim calls per day, and many people are not successful. This is going to be the most profund economic event of our lives. Hopefully more like 1893 than 1929.
- onlyrealcuzzo 6y ago
  https://en.m.wikipedia.org/wiki/Panic_of_1893 https://en.m.wikipedia.org/wiki/Panic_of_1893 ^ for anyone who doesn't know, 1893 seemed to be the first of many Argentine financial crises, caused by a wheat crop failure, which caused a negative feedback loop as (mostly) European investors pulled out of South Africa and Australia. The effects spilled over into the US and UK financial systems, led to runs on the banks, and caused a severe recession for 2 years.
cm2187 6y ago
And also there are still a few states that aren't in lockdown yet. And meanwhile markets are up!
vekker 6y ago
That's not too bad... here in Belgium we currently have half of the working population on unemployment benefits.
- stupandaus 6y ago
  The US' unemployment rate was much, much lower than many western European unemployment rates prior to coronavirus, so it doesn't make sense to compare the absolute number here - instead you should be comparing relative figures. The US' unemployment rate has tripled in the past 2 weeks based on this analysis.
- schrijver 6y ago
  Then again for the part of that which is related to corona it’s mostly through the mechanism of temporary unemployment, where the state takes over paying part of the paycheck for the duration of the time that the workers can’t work, and they are expected to return to their jobs once the lockdown is over. Of course not all companies will survive post-corona but it seems like an approach that potentially better preserves the social and economic tissue. cf https://www.nytimes.com/2020/04/01/business/france-coronavirus-unemployment.html https://www.nytimes.com/2020/04/01/business/france-coronavir... (not about Belgium, but the approach is common to multiple EU countries)
  - ivankolev 6y ago
    Canada too, up to 75% of the payroll, for companies with 30%+ decline in revenue. It will take weeks to roll though, it is all promises as of now
paganel 6y ago
Afaik Norway was one of the first countries that made similar numbers public, as about a week ago they had announced that unemployment had risen from app. 2% to 10.4%. The article is here [1]. My ballpark estimate is GDP going down by 20-30% for the next two quarters at least. [1] https://www.bloomberg.com/news/articles/2020-03-24/norway-jobless-rate-soars-to-highest-since-wwii-as-crisis-hits https://www.bloomberg.com/news/articles/2020-03-24/norway-jo...
- onefuncman 6y ago
  Austria 8.1% Feb 2020 -> 12.2% Mar 2020 Philippines 4.5% -> 5.3% Belarus 0.3% -> 0.2% (???) per https://tradingeconomics.com/country-list/unemployment-rate https://tradingeconomics.com/country-list/unemployment-rate Israel 18.6% 3/24 to 24.4% today - https://en.globes.co.il/en/article-unemployment-in-israel-up-to-186-1001323094 https://en.globes.co.il/en/article-unemployment-in-israel-up... and https://www.jpost.com/Breaking-News/The-number-of-unemployed-in-Israel-tops-1-million-for-the-first-time-623151 https://www.jpost.com/Breaking-News/The-number-of-unemployed... I'm not sure why Israel has their numbers available so quickly.
  - myth_drannon 6y ago
    Belarus, I suspect agriculture sector is working 110% to provide more food to Russia which started to have food runs.
matwood 6y ago
Correct. Todays number isn't even much of a surprise, although it's still shocking to see. I thought the consensus estimate was way too low. Some analysts have been kicking around 20%-30% unemployment before this is all over.
- jiofih 6y ago
  The US economy looks more like a pyramid scheme than ever.
  - malandrew 6y ago
    The virtuous cycle provided by a functioning market is not a pyramid scheme. Not even close. Pyramid schemes transfer wealth from the bottom to the top while creating no new additional wealth. America is creating tons of additional wealth and how much each gets from that wealth is proportional to one's leverage and one's leverage is generally proportional to how much one is able to contribute to wealth generation (in either talent or useful capital)
    - jiofih 6y ago
      “Virtuous”. It is fueled by artificial growth. It demands growth and makes sustainable, stable businesses a liability. It is absurd to see companies folding barely two weeks into hardship.
      - matwood 6y ago
        > It is absurd to see companies folding barely two weeks into hardship. Why? Companies sitting on tons of cash is a bad thing. That cash either needs to be invested through hiring, buying equipment, etc...or paid out to the shareholders (who then spend, invest, etc...). Sitting on cash traps capital that could be doing something else to create value. And before you say companies need to plan better, companies do plan for downturns. But, no company plans for their revenues to go to near zero overnight.
    - buzzkillington 6y ago
op03 6y ago
Is there a state wise breakdown? I would guess NYC is contributing a big chunk, and if things turn around there in a month or two should be okay.
- japhyr 6y ago
  Do you have any reason to think we're not going to see the situation in NYC play out in numerous other US cities over the coming weeks and months?
  - op03 6y ago
    Not really. I have been thinking its going to play out like China, Italy, Spain etc where certain regions take disproportionate hits. Texas and California don't seem to have been hit as hard as NY-NJ. So was just wondering if the unemployment filings have jumped equally in all 3.
    - stevenwoo 6y ago
      Everything that is non essential in California is closed and only companies that can function with only working from home are still operating AFAIK. It doesn't matter how bad the outbreak is here, we've been on a shutdown for longer than anywhere in the USA, at least here in Northern California. Many restaurants have closed, only some are open for take out, but that probably depends on area. This last week they finally told many construction/lawn maintenance workers to stay home as well, depending upon circumstances.
    - redisman 6y ago
      Florida could worse, they just shut things down yesterday(!) and they have more cases than WA today which has been effectively shut down for a month or so.
    - deepakhj 6y ago
      Most businesses/restaurants are closed here. I would imagine the #'s are the same.
SilasX 6y ago
To save everyone the search, here's the link to parent's analysis from last week: https://news.ycombinator.com/item?id=22693012 https://news.ycombinator.com/item?id=22693012
doh 6y ago
This is just a personal opinion, but I think ~15% unemployment peak is far too optimistic. I believe that 50-75% of restaurants will never reopen. 20-35% of small to mid-size hotels, venues, spas will declare bankruptcy within this year. Both employ a lot of people. So I'm afraid the number is going to much higher, maybe even double.
- shostack 6y ago
  So much of this depends on how the administration handles this. I don't have great confidence based on how they've handled things so far.
  - redisman 6y ago
    Probably most small(and medium, and big) businesses can hold on for a month or two at this rate but failure rate is going to approach 100% as time goes on.
  - doh 6y ago
    Very true. I spoke to a few economists and they believe there are going to be two or three waves of CARE ACT-like packages. It's easy to criticize the government without having to bear the responsibility but I wish they did this much earlier, with more force to bring confidence to the people rather than markets. I spoke with a branch manager at a bank day before they announced the extended timeline for shut down up until end of April. She was cheerful because she believed that this will be over in two weeks. I tried to gently tell her that I believe we are looking at months (two at minimum), not weeks of lockdown and even that might be very optimistic. She didn't take it well. People are confused and scared. I do wish the govs (local and federal) would be the leaders everyone needs them to be, but unfortunately, that's not yet happening (there are some exceptions, but very few unfortunately).
- unethical_ban 6y ago
  Half of all restaurants in the US will not reopen? Multi-year depression?
  - 6y ago
apatters 6y ago
If the unemployment rate continues to rise at this pace (about 7% every two weeks), it will match the peak during the Great Depression (25%) around the end of April. That's 40 million people who will have no income and likely no health care in the middle of a pandemic. Not sure how to process this information honestly.
- trhway 6y ago
  >That's 40 million people who will have no income and likely no health care in the middle of a pandemic. if the government were to help regular people that would be say $1T/40M = $25K - one can survive a month or two on that (and those money would have naturally trickled promptly up thus also supporting the top of the economy - corporations, banks, etc. - instead of being directly accumulated there like in the current trickle down approach). My understanding that is what they ultimately did in Great Depression - by way of public works and rudimentary safety net - though the things had to get really bad before they did it, and one can only wonder how much things have to get bad this time.
  - blueline 6y ago
    >$25K - one can survive a month or two on that US median yearly household income is about $61k
- deleted 6y ago
  [deleted]
- koheripbal 6y ago
  You cannot simply extrapolate trends ad infinitum. You have to look at the vulnerable industries, and assume percentage of those jobs will be lost, up to the limit of that industry. ...but certainly, the longer everyone stays home, the more industries will be sucked into the void. Ultimately, we will have no choice but to advise people to go back to their lives, despite the risks. The government does not have the ability to bail out every single industry in the economy.
  - 6y ago
blackRust 6y ago
You may be interested in these predictions: * https://www.metaculus.com/questions/3922/what-will-be-the-us-unemployment-rate-for-march-2020/ https://www.metaculus.com/questions/3922/what-will-be-the-us... * https://www.metaculus.com/questions/3933/what-will-be-the-us-unemployment-rate-for-april-2020/ https://www.metaculus.com/questions/3933/what-will-be-the-us...

treyfitty 6y ago

The forecasted unemployment rate is weird: economists are not forecasting a major increase for April 03s release. Do you happen to know why? https://tradingeconomics.com/united-states/unemployment-rate https://tradingeconomics.com/united-states/unemployment-rate

itamarst 6y ago
April unemployment is probably only measured mid-March, so it predates all these claims.
hurricanetc 6y ago
They do the monthly survey in the middle of the month. Most of the state shutdowns happened after the surveys were completed. Don’t ask me why they don’t just use the weekly numbers.
- makomk 6y ago
  The weekly numbers are unemployment benefit claims, whereas I think the monthly employment statistics are based on surveying the population and counting the actual number of people who are employed, seeking work, etc.
  - hurricanetc 6y ago
    Yeah I understand the distinction but the weekly numbers capture much of the same information and are more accurate. The monthly survey is just something we do because we’ve done it for a long time.
- TheCoelacanth 6y ago
  The weekly numbers are number of newly unemployed. The unemployment survey is measuring how many people are currently unemployed. The former is correlated with the rate of change in the latter, but is not the same thing.

airstrike 6y ago

I'm also hearing this morning that we've hit the 10% mark. I also heard the same economist say "The economy is collapsing, and it's a global collapse". I don't even need coffee to be alert the rest of the day...

buzzkillington 6y ago
And all this for a virus that kills around 1% of the people who get it, and the majority of them are retired. Future generations will look at us and wonder how we were this stupid.
- AlexandrB 6y ago
  You should check the numbers coming out of Italy. It’s not 1% if the medical system is overwhelmed. Moreover, you do realize that’s 3 million dead in the US alone?
  - x0x0 6y ago
    It's universally true that the people eager to feed the olds (and a bunch of non-olds, too) into the wood chipper never seem to have their, and their parents', do-not-treat orders signed.
  - nostrebored 6y ago
    It's also not the reported number in Italy. The sources of error in the data are enough to make the data fairly meaningless. 1. We have no idea how many people were infected 2. We have no idea how many people who have died died from Covid 19 3. The population pyramid in Italy is extremely disparate from the rest of the world. The medical system being overwhelmed is a portion of the contribution, and what it means to be 'overwhelmed' is about as clear as what it means to have an error in your application. Are you overwhelmed due to lack of beds? Lack of ventilator access? Lack of doctors? What are the numbers for these in the remainder of the world? Treating any modeling we have of the impact of Covid 19 as reliable is an exercise in insanity. EDIT: To be clear this isn't to say that the responses are unwarranted. It's just to say that they are conservative and acting on knowingly incorrect information. If they were the right decisions remains to be seen. The impact of global financial collapse isn't just 'stocks down', but has tangible impacts on life expectancy, healthcare quality, and quality of life globally. Time will tell.

enraged_camel 6y ago

Goldman Sach may estimate the unemployment rate peaking at 15%, but the Fed said it could reach 32% by summer.

Spooky23 6y ago

Data released in New York alone is that they are getting 250-300k successful initial claim calls per day, and many people are not successful. This is going to be the most profund economic event of our lives. Hopefully more like 1893 than 1929.

onlyrealcuzzo 6y ago
https://en.m.wikipedia.org/wiki/Panic_of_1893 https://en.m.wikipedia.org/wiki/Panic_of_1893 ^ for anyone who doesn't know, 1893 seemed to be the first of many Argentine financial crises, caused by a wheat crop failure, which caused a negative feedback loop as (mostly) European investors pulled out of South Africa and Australia. The effects spilled over into the US and UK financial systems, led to runs on the banks, and caused a severe recession for 2 years.

cm2187 6y ago

And also there are still a few states that aren't in lockdown yet. And meanwhile markets are up!

vekker 6y ago

That's not too bad... here in Belgium we currently have half of the working population on unemployment benefits.

stupandaus 6y ago
The US' unemployment rate was much, much lower than many western European unemployment rates prior to coronavirus, so it doesn't make sense to compare the absolute number here - instead you should be comparing relative figures. The US' unemployment rate has tripled in the past 2 weeks based on this analysis.
schrijver 6y ago
Then again for the part of that which is related to corona it’s mostly through the mechanism of temporary unemployment, where the state takes over paying part of the paycheck for the duration of the time that the workers can’t work, and they are expected to return to their jobs once the lockdown is over. Of course not all companies will survive post-corona but it seems like an approach that potentially better preserves the social and economic tissue. cf https://www.nytimes.com/2020/04/01/business/france-coronavirus-unemployment.html https://www.nytimes.com/2020/04/01/business/france-coronavir... (not about Belgium, but the approach is common to multiple EU countries)
- ivankolev 6y ago
  Canada too, up to 75% of the payroll, for companies with 30%+ decline in revenue. It will take weeks to roll though, it is all promises as of now

paganel 6y ago

Afaik Norway was one of the first countries that made similar numbers public, as about a week ago they had announced that unemployment had risen from app. 2% to 10.4%. The article is here [1]. My ballpark estimate is GDP going down by 20-30% for the next two quarters at least. [1] https://www.bloomberg.com/news/articles/2020-03-24/norway-jobless-rate-soars-to-highest-since-wwii-as-crisis-hits https://www.bloomberg.com/news/articles/2020-03-24/norway-jo...

onefuncman 6y ago
Austria 8.1% Feb 2020 -> 12.2% Mar 2020 Philippines 4.5% -> 5.3% Belarus 0.3% -> 0.2% (???) per https://tradingeconomics.com/country-list/unemployment-rate https://tradingeconomics.com/country-list/unemployment-rate Israel 18.6% 3/24 to 24.4% today - https://en.globes.co.il/en/article-unemployment-in-israel-up-to-186-1001323094 https://en.globes.co.il/en/article-unemployment-in-israel-up... and https://www.jpost.com/Breaking-News/The-number-of-unemployed-in-Israel-tops-1-million-for-the-first-time-623151 https://www.jpost.com/Breaking-News/The-number-of-unemployed... I'm not sure why Israel has their numbers available so quickly.
- myth_drannon 6y ago
  Belarus, I suspect agriculture sector is working 110% to provide more food to Russia which started to have food runs.

matwood 6y ago

Correct. Todays number isn't even much of a surprise, although it's still shocking to see. I thought the consensus estimate was way too low. Some analysts have been kicking around 20%-30% unemployment before this is all over.

jiofih 6y ago
The US economy looks more like a pyramid scheme than ever.
- malandrew 6y ago
  The virtuous cycle provided by a functioning market is not a pyramid scheme. Not even close. Pyramid schemes transfer wealth from the bottom to the top while creating no new additional wealth. America is creating tons of additional wealth and how much each gets from that wealth is proportional to one's leverage and one's leverage is generally proportional to how much one is able to contribute to wealth generation (in either talent or useful capital)
  - jiofih 6y ago
    “Virtuous”. It is fueled by artificial growth. It demands growth and makes sustainable, stable businesses a liability. It is absurd to see companies folding barely two weeks into hardship.
    - matwood 6y ago
      > It is absurd to see companies folding barely two weeks into hardship. Why? Companies sitting on tons of cash is a bad thing. That cash either needs to be invested through hiring, buying equipment, etc...or paid out to the shareholders (who then spend, invest, etc...). Sitting on cash traps capital that could be doing something else to create value. And before you say companies need to plan better, companies do plan for downturns. But, no company plans for their revenues to go to near zero overnight.
  - buzzkillington 6y ago

op03 6y ago

Is there a state wise breakdown? I would guess NYC is contributing a big chunk, and if things turn around there in a month or two should be okay.

japhyr 6y ago
Do you have any reason to think we're not going to see the situation in NYC play out in numerous other US cities over the coming weeks and months?
- op03 6y ago
  Not really. I have been thinking its going to play out like China, Italy, Spain etc where certain regions take disproportionate hits. Texas and California don't seem to have been hit as hard as NY-NJ. So was just wondering if the unemployment filings have jumped equally in all 3.
  - stevenwoo 6y ago
    Everything that is non essential in California is closed and only companies that can function with only working from home are still operating AFAIK. It doesn't matter how bad the outbreak is here, we've been on a shutdown for longer than anywhere in the USA, at least here in Northern California. Many restaurants have closed, only some are open for take out, but that probably depends on area. This last week they finally told many construction/lawn maintenance workers to stay home as well, depending upon circumstances.
  - redisman 6y ago
    Florida could worse, they just shut things down yesterday(!) and they have more cases than WA today which has been effectively shut down for a month or so.
  - deepakhj 6y ago
    Most businesses/restaurants are closed here. I would imagine the #'s are the same.

SilasX 6y ago

To save everyone the search, here's the link to parent's analysis from last week: https://news.ycombinator.com/item?id=22693012 https://news.ycombinator.com/item?id=22693012

doh 6y ago

This is just a personal opinion, but I think ~15% unemployment peak is far too optimistic. I believe that 50-75% of restaurants will never reopen. 20-35% of small to mid-size hotels, venues, spas will declare bankruptcy within this year. Both employ a lot of people. So I'm afraid the number is going to much higher, maybe even double.

shostack 6y ago
So much of this depends on how the administration handles this. I don't have great confidence based on how they've handled things so far.
- redisman 6y ago
  Probably most small(and medium, and big) businesses can hold on for a month or two at this rate but failure rate is going to approach 100% as time goes on.
- doh 6y ago
  Very true. I spoke to a few economists and they believe there are going to be two or three waves of CARE ACT-like packages. It's easy to criticize the government without having to bear the responsibility but I wish they did this much earlier, with more force to bring confidence to the people rather than markets. I spoke with a branch manager at a bank day before they announced the extended timeline for shut down up until end of April. She was cheerful because she believed that this will be over in two weeks. I tried to gently tell her that I believe we are looking at months (two at minimum), not weeks of lockdown and even that might be very optimistic. She didn't take it well. People are confused and scared. I do wish the govs (local and federal) would be the leaders everyone needs them to be, but unfortunately, that's not yet happening (there are some exceptions, but very few unfortunately).
unethical_ban 6y ago
Half of all restaurants in the US will not reopen? Multi-year depression?
- 6y ago

apatters 6y ago

If the unemployment rate continues to rise at this pace (about 7% every two weeks), it will match the peak during the Great Depression (25%) around the end of April. That's 40 million people who will have no income and likely no health care in the middle of a pandemic. Not sure how to process this information honestly.

trhway 6y ago
>That's 40 million people who will have no income and likely no health care in the middle of a pandemic. if the government were to help regular people that would be say $1T/40M = $25K - one can survive a month or two on that (and those money would have naturally trickled promptly up thus also supporting the top of the economy - corporations, banks, etc. - instead of being directly accumulated there like in the current trickle down approach). My understanding that is what they ultimately did in Great Depression - by way of public works and rudimentary safety net - though the things had to get really bad before they did it, and one can only wonder how much things have to get bad this time.
- blueline 6y ago
  >$25K - one can survive a month or two on that US median yearly household income is about $61k
deleted 6y ago
[deleted]
koheripbal 6y ago
You cannot simply extrapolate trends ad infinitum. You have to look at the vulnerable industries, and assume percentage of those jobs will be lost, up to the limit of that industry. ...but certainly, the longer everyone stays home, the more industries will be sucked into the void. Ultimately, we will have no choice but to advise people to go back to their lives, despite the risks. The government does not have the ability to bail out every single industry in the economy.
- 6y ago

blackRust 6y ago

You may be interested in these predictions: * https://www.metaculus.com/questions/3922/what-will-be-the-us-unemployment-rate-for-march-2020/ https://www.metaculus.com/questions/3922/what-will-be-the-us... * https://www.metaculus.com/questions/3933/what-will-be-the-us-unemployment-rate-for-april-2020/ https://www.metaculus.com/questions/3933/what-will-be-the-us...