- Claims are often the early warning for labor market problems.
- Jobless claims for the March 13 week may give hint of coming layoffs.
- Markets are in an extremely unsettled condition.
The Department of Labor will issue its initial jobless claims for the week of March 13 on Thursday March 19 at 12:30 GMT, 8:30 EDT.
Forecast
Initial claims are expected to rise to 220,000 from 211,000 the prior week. The four-week moving average is predicted to rise to 216,410 from 214,000.
Initial jobless claims
The filing of a claim for unemployment insurance is normally one of the first actions by anyone in the US who has lost a job. Workers in most states are eligible for 26 weeks of payments under the joint federal-state program that replaces part of their lost wages.
Because these figures are released weekly at just a six day delay they give the most timely indication of problems in the labor market.
In the current situation with furloughs and layoffs expected due to widening business closures in the US from the Coronavirus there have been, as yet, no concrete numbers on job losses, only speculation.
Conclusion
Equity losses, the decline in credit yields and the safe-haven rise in the US dollar have been on the assumption that the economic dislocation needed to fight the spread of the virus will cause a serious slowdown in global growth if not a recession.
Initial jobless claims have been at or near historic lows in the US for more than a year and they have a long way to rise before they suggest the type of job losses that took place in the financial crisis.
Nonetheless, in the febrile state of the equity, currency and credit markets, confirmation of the slowdown thesis will likely reinforce current trends.
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