<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The coronavirus outbreak, or COVID-19, has pushed the U.S. economy to break yet another record, with 6.648 million people applying for unemployment claims for the week ending March 28.” data-reactid=”16″>The coronavirus outbreak, or COVID-19, has pushed the U.S. economy to break yet another record, with 6.648 million people applying for unemployment claims for the week ending March 28.
This number is a sign of the times to come, one economist wrote.
“Net, net, job layoffs are soaring faster than any time in recorded history,” Chris Rupkey, MUFG managing director and chief financial economist, wrote in a note on Thursday morning. “This looks bad and it is bad. The worst jobless claims in U.S. history means the economy has fallen into the abyss. Stay tuned. Story developing.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The unemployment numbers for the week ending March 21 had already been shocking enough, where 3.307 million claims were filed. This week’s claims doubled that. And prior to the coronavirus-induced economic shock, the previous record was 695,000 claims filed the week that ended October 2, 1982. ” data-reactid=”19″>The unemployment numbers for the week ending March 21 had already been shocking enough, where 3.307 million claims were filed. This week’s claims doubled that. And prior to the coronavirus-induced economic shock, the previous record was 695,000 claims filed the week that ended October 2, 1982.
(Graphic: David Foster/Yahoo Finance)
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="‘American workers have nowhere to hide’” data-reactid=”40″>‘American workers have nowhere to hide’
The jobless claims number is likely to increase further in the coming weeks, according to Rupkey.
“We knew that massive job losses were coming because of reports that many workers were unable to file a claim for benefits even after waiting on line for hours,” he wrote.
This is perhaps an indication that U.S. economy has “skipped recession and has already moved deep into the depression zone,” he added. “American workers have nowhere to hide as the job layoffs are going to go global as world trade collapses.”
Economists, though not fully prepared for the extent of the unemployment claims figures as evidenced by all major consensus estimates being lower than the latest jobless claims, were at least mentally prepared for whatever is in store in the upcoming weeks and months.
Coronavirus cases are still on the rise. (Graphic: David Foster/Yahoo Finance)
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“Economic data in the near future will be not just bad, but unrecognizable,” Credit Suisse economists led by James Sweeney wrote last week. “Anomalies will be ubiquitous and old statistical relationships within economic data or between market and macro data might not always hold… There is no blueprint for the current shock, and uncertainty about the extent of contagion and the economic consequences is overwhelming.”” data-reactid=”65″>“Economic data in the near future will be not just bad, but unrecognizable,” Credit Suisse economists led by James Sweeney wrote last week. “Anomalies will be ubiquitous and old statistical relationships within economic data or between market and macro data might not always hold… There is no blueprint for the current shock, and uncertainty about the extent of contagion and the economic consequences is overwhelming.”
Economists at Goldman Sachs warned that U.S. GDP would collapse 34% in Q2, which would be more than triple the record 10% drop seen in 1958.
In their latest note, Goldman analysts explained that “the anecdotal evidence and the sky-high jobless claims numbers show an even bigger output and (especially) labor market collapse than we had anticipated. This not only means deeper negatives in the very near term but also raises the specter of more adverse second-round effects on income and spending a bit further down the road.”
Kayaking off a cliff. (Getty Images)
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Millions of Americans are at risk” data-reactid=”92″>Millions of Americans are at risk
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="While the virus continues to spread, experts warn that the desire to rush a re-opening of the economy is incredibly ill-advised.” data-reactid=”93″>While the virus continues to spread, experts warn that the desire to rush a re-opening of the economy is incredibly ill-advised.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“With a further spread of the virus and repeated lock-downs, we also see more scarring from this scenario, with growth returning to only slightly positive in Q4 and only slowly normalizes in 2021,” Deutsche Bank analysts wrote in a note. “For the year, the economy contracts 7.8% in 2020 under this profile (-10.9% Q4/ Q4), and the rebound is more subdued in 2021, with activity rising only 2.0% (6.4% Q4/Q4).”” data-reactid=”94″>“With a further spread of the virus and repeated lock-downs, we also see more scarring from this scenario, with growth returning to only slightly positive in Q4 and only slowly normalizes in 2021,” Deutsche Bank analysts wrote in a note. “For the year, the economy contracts 7.8% in 2020 under this profile (-10.9% Q4/ Q4), and the rebound is more subdued in 2021, with activity rising only 2.0% (6.4% Q4/Q4).”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Overall, more than 66 million jobs across sales, production, and food preparation services are at “high risk” of layoffs, according to a St. Louis Federal Reserve economist earlier this month.” data-reactid=”95″>Overall, more than 66 million jobs across sales, production, and food preparation services are at “high risk” of layoffs, according to a St. Louis Federal Reserve economist earlier this month.
(Graphic: David Foster)
Using 2018 occupational data from the Bureau of Labor Statistics (BLS) detailing 808 occupations, the St. Louis Fed’s Charles Gascon found that 66.8 million people — 46% of working Americans — are employed in these occupations that are at “high risk” of layoffs.
These included people involved in food preparation and serving-related occupations as well as those in sales, production, installation, maintenance, and repair jobs.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The Economic Policy Institute estimates that nearly 20 million workers will be laid off or furloughed by July.” data-reactid=”118″>The Economic Policy Institute estimates that nearly 20 million workers will be laid off or furloughed by July.
Rupkey did note a silver lining among the depressed consumer spending outlook.
“The trade deficit in February is narrowing and that’s a good thing as it will add to GDP growth and right now there is limited growth ahead so any sector of the economy that can lend a hand is welcome,” he stated. “Americans buy less imported goods in a recession, that’s a fact, an ironic fact that reduced imports add to GDP growth.”
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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Aarthi is a reporter for Yahoo Finance. Follow her on Twitter @aarthiswami.” data-reactid=”143″>Aarthi is a reporter for Yahoo Finance. Follow her on Twitter @aarthiswami.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
