CIBC Research discusses its reaction to today's US initial jobless claims.
"Records are made to be broken, but let's hope last week's record increase in initial jobless claims isn't. Initial claims surged by 3.28m, well above the already elevated 1.7m consensus and a figure that's equal to more than 2% of the employed population as per February's household survey (although that's a smaller proportion of the employed population than the spike in jobless claims seen in Canada during the same period). There were suggestions that state websites and phone systems were struggling to cope with the volume of applicants, implying that today's figure could actually understate the number of people losing their jobs and suggesting that we will see further very high claims numbers in the weeks to come. The previous record for weekly jobless claims (dating back to 1967) was a "mere" 695K back in 1982, showing just how quickly the economic landscape has changed in the last couple of weeks," CIBC adds.
"Initial claims will remain highly elevated in the near-term as further areas of the US economy face shutdowns, more companies lay off staff and more claims are processed, although the fiscal support package announced earlier this week should hopefully help soften the blow. Note that this big increase in jobless claims comes after the survey week for March's payroll and unemployment data, which is why the early consensus for next Friday's release is for the jobless rate to increase fairly modestly to around 4%. A much bigger jump will be seen with the release of April data," CIBC adds.