Unemployment Claims Hit 16.8M in 3 Weeks

With an additional 6.6 million claims reported this morning, the figures paint a telling image of what's expected this month.
Image via Pixabay.com

The week ending on April 4 brought another 6.6 million initial unemployment claims, pushing the three-week tally to almost 16.8 million, according to a U.S. Department of Labor report released on Thursday morning. The week ending on March 28 had registered almost 6.9 million claims, revised figures show, more than double the previous 3.3 million, which had itself established an all-time record for the seasonally adjusted series.  

The new numbers, which paint a telling picture of what to expect from April unemployment figures, come on the heels of anecdotal evidence of backlogs at the state level, widely cited over the past weeks.

Unsurprisingly, the country’s most populous 10 states accounted for about 54 percent of last week’s new claims. For the whole three-week period,  California topped the list with more than 2.1 million claims, followed by Pennsylvania (over 1 million), Michigan (817,185) and New York (791,840).

 

 

California was the first state to impose a stay at home order on March 19. Of the top 10 largest, another five had similar arrangements going into April. Texas, Florida, Pennsylvania and Georgia joined the list during the first week of the month. As of Tuesday, April 7, 42 U.S. states had blanket stay-at-home orders, according to data aggregated by The New York Times

Wrapping up March

The unemployment rate went up 90 basis points to 4.4 percent last month, according to preliminary figures released by the Bureau of Labor Statistics last Friday, marking the first negative job growth report in a decade. The U.S. economy lost 701,000 jobs in March, roughly two-thirds of which were in leisure and hospitality, the sector hit hardest by widespread social distancing measures enforced in an effort to combat an even faster escalation of the COVID-19 pandemic.

Even so, March figures come with a sizable caveat due to BLS methodology. The bureau’s establishment and household surveys—the two methods used for calculating the unemployment rate and net job gains—both used the week ending March 14 as a reference. President Trump declared the coronavirus pandemic a national emergency on March 13, and CDC guidelines on gatherings followed two days later. In the context of accelerated losses, some March activity will most likely spill over into the April figures.

While leisure and hospitality recorded a very sharp drop last month, almost all sectors contracted, including education and health services (-76,000 positions), professional and business services (-52,000), retail trade (-46,000) and construction (-29,000).

Uncharted territory

Facing an unprecedented crisis, economists and commercial real estate analysts are scrambling to find the best indicators of what’s to come. Weighing in the pandemic’s evolution, the stock market and job numbers, the industry is also taking into consideration energy consumption, mobility data and public records activity.

Office building electricity consumption in the U.S. dropped 22 percent over the four weeks up to April 4, a recent Hatch Data report shows, with the decline more or less following the timing of stay-at-home orders. Compared against a February baseline, overall U.S. electricity usage was down nearly 8 percent at the beginning of April, a New York Times analysis shows. For New York City alone, the figure was closer to 15 percent.

Meanwhile, a Google mobility project focusing on changes brought by social distancing is offering data at a state and even county level across a range of indicators. The list includes mobility data recorded for a list of location types including retail and recreation, grocery and pharmacies, parks, transit stations, workplaces and residential areas.

The Google project focuses mainly on reflecting the effects of shelter-in-place recommendations worldwide. Nonetheless, such tools can prove extremely helpful as a reflection of how mobility trends affect the wider economy and real estate in particular, especially when and where social distancing measures are just kicking in or are steadily eased.