- Jobless claims forecast to rise to 617,000 from 576,000.
- Continuing Claims expected to drop to 3.667 million from 3.731 million.
- American economy created 1.617 million jobs in the first quarter.
- The economic changes wrought and intensified by the pandemic continue to plague labor markets.
- Markets have stopped looking to claims for economic direction.
Yet even as GDP expansion accelerates to what could be the best year in a generation, layoffs continue at rates reminiscent of the financial crisis.
Initial Jobless are forecast to rise to 617,000 in the April 16 week. The previous 574,000 was the lowest of the pandemic era.
Continuing Claims are expected to fall to 3.667 million in the week of April 9 from 3.731 million and 3.727 million prior, both the smallest totals since March 20 2020.
Job creation had an excellent first quarter. Hiring almost quadrupled from January’s 233,000 to 916,000 in March and was two-and-a-half times the 638,000 in the lockdown marred third quarter. American firms have rehired 62% of the 22.362 million workers fired in the March and April panic last year, leaving 8.4 million still unemployed.
At the first quarter rate of hiring it would take until the first week of September to completely reconstitute the US labor market.
The long-term economic damage of the lockdown approach to the pandemic is evident in the claims figures. More than a year after the initial closures businesses continue to fail and eliminate jobs at rates comparable to the year following the financial crash of 2008.
Claims peaked on February 21, 2009 at 667,000. A year later claims were 469,000, nearly back to the level of the three months before the fourth quarter 2008 collapse.
On March 13, 2020 the last statistic before the lockdown impact, the four week moving average was 232,500. It was 683,000 in the April 9, 2021 week.
Initial Jobless Claims
Markets have stopped watching the Initial Jobless Claims figures for economic direction. Layoffs are retrograde. They are the fallout of last year’s preventative economic measures. They have little to say about growth and hiring in the next three quarters.
The pandemic did more than shut the economy for several months and in some industries for much longer. It intensified economic changes already underway but below the general radar.
Working from home is no longer a part-time indulgence for many workers and companies but a new paradigm.
The ramifications of some of those changes, on urban economies and real estate and tax values for example, will take years to reach full impact.
Others, in the retail and travel businesses for instance, are already permanent and evident in the failures of old business models.
That destruction will keep layoffs high even as different businesses charge into the new economy.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.