The broader affects of the COVID-19 coronavirus continue to wreak havoc on the U.S. labor market. This morning’s latest Initial Jobless Claims report brought 2.438 million new claims over the past week, down from the downwardly revised 2.69 million the week prior, but higher than the 2.35 million analysts were expecting. This is the 9th straight week of initial claims totals in the millions, which had been unprecedented beforehand.
We are well off the worst of the worst in new claims — in fact, we continue our notable and consistent downward trajectory since this report shocked the country with 6.867 million jobless claims in one week. But in aggregate, these numbers depict a very deep hole that will likely take a long time to completely fill back up. Since March 22nd, initial claims have totaled 38.6 million, or nearly 30% of the total U.S. workforce.
Continuing Claims, which report a week in arrears and act as sort of a flood peak on weekly unemployment figures, crested above 25 million to 25.073 million two weeks ago. This follows a significant downward revision from the previous week to 22.548 million; the original report from that week had also gone to 25 million. Even still, our latest figure represents a new all-time high in longer-term jobless claims.
Of course, getting past the “shelter in place” time period of the COVID-19 pandemic should bring a snap-back to a percentage of this labor market. However, it remains unclear what percentage of our previously record-high employment levels may include jobs that are gone for good, or at least for the next couple years. “Right-sizing” employers may find their functionality acceptable after having shed some of their workforce. Might this bring about new opportunities in growing sub-industries? Perhaps, though this further complicates the overall outlook.
The Philly Fed survey for May was also worse than expected, at -43.1 versus the consensus estimate of -40. However, this is markedly better than the -56.6 we saw reported for April. Even then, this index tracking Philadelphia’s economic productivity was not an all-time low (this came back in 1974, at -57.9). Yet the region is still under water; prior to the bottom falling out in March, Philly Fed surveys had been in positive territory each month since early 2016.
Bed Bath & Beyond (BBY - Free Report) beat Q1 estimates ahead of today’s opening bell, with 67 cents per share well ahead of the 41 cents in the Zacks consensus. It compares unfavorably with the $1.02 per share reported in the year-ago quarter. Sales beat expectations by 5% to $8.58 billion, down a bit from the $9.14 billion from Q1 of last year. Shares are trading down on the news in the early market, but had been outperforming the S&P 500 year to date.
After today’s close, we will see quarterly reports from NVIDIA (NVDA - Free Report) , Hewlett Packard Enterprises (HPE - Free Report) and Deckers Outdoor (DECK - Free Report) .