Weekly unemployment insurance claims data will yield the first sign of just how hard the coronavirus is hitting the US economy, and early signals aren’t promising.
The Department of Labor is scheduled to release claims data for the week ended March 14 on Thursday at 8:30 a.m. Such data serves as a proxy for national unemployment and is poised to soar in the coming weeks. Business closures, quarantine orders, and early layoffs are likely to push claims higher as more Americans reenter the job market.
While most major cities’ shutdown measures didn’t take effect until after March 14, Thursday’s release will detail how the labor market first reacted to the jump in US coronavirus cases.
Last week’s report showed seasonally adjusted claims falling 4,000 to 211,000 for the week ended March 7. The consensus estimate for Thursday’s report sits at 220,000, the metric’s highest level since early January.
Individual state data is already painting a bleak picture of how badly the job market could suffer in the near future. Kentucky, New York, and Oregon all experienced website outages for unemployment benefits pages this week, according to The Wall Street Journal, attributing the issues to spikes in traffic. Kentucky typically processes 2,000 claims per week, yet received more than 9,000 claims on Tuesday, The Journal reported.
New York’s web server faced increased claims interest on Monday, the state’s labor department said in a tweet. The traffic jump arrived the same day New York Governor Andrew Cuomo declared temporary closures of bars, entertainment venues, and gyms.
An uptick in unemployment claims could be driven by states’ expanding eligibility as the virus’ economic toll intensifies. Several state governments are allowing quarantined workers and those without paid sick leave to apply for unemployment benefits.
Jobs data from career website Glassdoor is also suggesting a tightening of the labor market. Job openings slipped 1.5% in the week ended March 13, the website announced Wednesday. The decline dragged the pace of openings into the slowest 10% of weeks for growth since the start of 2016.
If Thursday’s data lays a foundation for the start of a potential labor market crisis, the release scheduled for March 19 could reveal how quickly such a contraction will come about. That update will include claims made after several cities’ lockdown policies started. The sudden stop to economic activity could drive between 150,000 and 200,000 claims onto next week’s report, economists at Bloomberg Economics said Wednesday, nearly doubling the current count.
Additional jumps over coming weeks could push the total above 500,000, the economists added, bringing the figure close to the financial crisis peak of 660,000.
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