6th Straight Week of 3 Million+ Jobless Claims
Economic Report Monitor #25
April 30th, 2020
It's yet another Thursday, and that means jobless claims for the last week of April. Initial claim applications were still bustling, up 3.84 million, just above the first week of 3 million+ initial claims in March. Insured unemployment grew to 12.4%. The increase in total insured unemployment was a bit slower than the pace of the previous week's increase in initial claims suggesting some people coming off unemployment in addition to people coming on. Michigan remains the state with the highest insured unemployed at 21.8% as durable goods spending takes a hit troubling the local auto industry.
Those jobless claims are looking to fill the gap of a -2.0% drop in personal income as reported by the Bureau of Economic Analysis. That drop was mostly caused by a decrease in wages and salaries, down -3.1% as businesses are forced to furlough and layoff workers. The loss in income contributed to a personal consumption expenditures drop of -7.5%, first visible in the GDP report. Also in the GDP report was the cratering of durable goods demand which is also visible in this report as that segment saw a -15.1% decline. The drawdown in demand in addition to low energy commodity prices lead to a softening in inflation as well. Annualized PCE price index fell from 1.8% in February to 1.3% in March with most of that decline coming from a -1.8% drop in durable goods price index drop.
The employment cost index for 2020 Q1 also came out today with not much of an impact from COVID-19 showing. Compensation grew 0.8% with wages and salaries picking up growth to 0.9%. Benefits saw slower growth of 0.4% with health benefits seeing a slower annualized growth. Since the report captured results over the quarter, the impact from COVID-19 will be visible in the next quarter's report. Both private industry and government workers saw the same increase in compensation, but government jobs saw benefits increase faster than the private industry. With health insurance likely to become a focal point in the upcoming presidential election, the growth of health benefits for workers will be important to keep individuals satisfied with their employer's insurance.
The last PMI of the calendar month of April was released today as the Institute of Supply Management released its Chicago Business Barometer. The index fell to 35.4, just off the lowest level in March 2009. New orders and production declined the most as seen in previous PMIs. Inventories rose by 39.4 pts as demand cooled. Labor demand fell 11.1 pts with the slowing in production. Prices also slipped, down -14.6 pts, but only to March 2016 levels. In a special question, 96.0% of respondents said that their businesses have taken actions to mediate supply issues because of COVID-19.
April 30th, 2020
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| From MarketWatch |
Those jobless claims are looking to fill the gap of a -2.0% drop in personal income as reported by the Bureau of Economic Analysis. That drop was mostly caused by a decrease in wages and salaries, down -3.1% as businesses are forced to furlough and layoff workers. The loss in income contributed to a personal consumption expenditures drop of -7.5%, first visible in the GDP report. Also in the GDP report was the cratering of durable goods demand which is also visible in this report as that segment saw a -15.1% decline. The drawdown in demand in addition to low energy commodity prices lead to a softening in inflation as well. Annualized PCE price index fell from 1.8% in February to 1.3% in March with most of that decline coming from a -1.8% drop in durable goods price index drop.
The employment cost index for 2020 Q1 also came out today with not much of an impact from COVID-19 showing. Compensation grew 0.8% with wages and salaries picking up growth to 0.9%. Benefits saw slower growth of 0.4% with health benefits seeing a slower annualized growth. Since the report captured results over the quarter, the impact from COVID-19 will be visible in the next quarter's report. Both private industry and government workers saw the same increase in compensation, but government jobs saw benefits increase faster than the private industry. With health insurance likely to become a focal point in the upcoming presidential election, the growth of health benefits for workers will be important to keep individuals satisfied with their employer's insurance.
The last PMI of the calendar month of April was released today as the Institute of Supply Management released its Chicago Business Barometer. The index fell to 35.4, just off the lowest level in March 2009. New orders and production declined the most as seen in previous PMIs. Inventories rose by 39.4 pts as demand cooled. Labor demand fell 11.1 pts with the slowing in production. Prices also slipped, down -14.6 pts, but only to March 2016 levels. In a special question, 96.0% of respondents said that their businesses have taken actions to mediate supply issues because of COVID-19.
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