Jobless Claims Analysis: Improvement? Nonfarm Payrolls-linked data is more than devastating

The third consecutive week of improvement? That fact provides little solace to the 4.427 million Americans that file for jobless benefits fro the first time in the week ending on April 17. Expectations stood at around 4.2 million. Continuing claims stand at 15.976 million in the week ending April 10, better than estimated. 

The headline initial unemployment claims are for the week ending on April 17 – the week that the Non-Farm Payrolls surveys are taken. The full jobs report for this month is only due out only on May 8 and may over 20 million job losses – within the accumulated filings for claims from mid-March through last week.

That may take an immediate toll on stock markets, which seem relatively calm for now. Consequently, the safe-haven dollar has room to rise, even though the data is for the US. When the American economy sneezes, the world catches a cold, and that adage remains relevant. 

Longer-term implications

The lockdowns – that are already showing success have in the slowing spread of coronavirus – are taking a heavy economic toll. The increase in jobless claims may add to pressure to reopen the economy – especially from President Donald Trump. Most state governors have acted prudently, yet such data and fewer daily COVID-19 deaths may cause them to act too soon to reopen their economies.

In turn, that may trigger a second wave of infections which could trigger another lockdown – with catastrophic consequences for consumer and business confidence, weighing heavily also on hiring. Therefore, the rapid pace of job destruction may also have a long-term devastating effect on the economy.