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First Cut: Unadjusted claims have an unprecedented spike higher of nearly 3 million in March 21 week

Initial jobless claims exploded 2,647,034 to an unadjusted 2,898,450 in the week ended March 21. There is no point in trying to analyze the weekly initial jobless claims data in the historical context or using seasonal adjustment factors. The one week change is massive and unprecedented. The number of workers laid off and applying for benefits was anticipated to spike, but the number is higher than markets estimate. However, as Ray Stone said to me yesterday, forecasting this one was pure guesswork. In question now is how long the workers will remain idled and on the unemployment rolls.

The Labor Department said, “States continued to cite services industries broadly, particularly accommodation and food services. Additional industries heavily cited for the increases included the health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries.” Claims were estimated for Ohio, Pennsylvania, and Puerto Rico.

Continuing claims in the March 14 week were up 101,000 to 1.803 million seasonally adjusted. The unadjusted change was up 119,945 to 2.097 million. The data catches the first large upward movement in claims but next week’s numbers will reflect the influx of claims processed and on the rolls. It may take state agencies a little time to catch up.

The insured rate of unemployment remained at 1.2% in the March 14 week where it has been since May 2018. However, next week should also see a significant increase along with continuing claims.

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