Chief Economist Scott Brown discusses current economic conditions.
The Bureau of Labor Statistics reports that all 50 states experienced a decrease in payrolls and an increase in unemployment in April. Following some weeks of varying degrees of mandated social distancing, all 50 states have now begun to open up their economies. The near-term economic data are expected to reflect a sharp contraction in 2Q20. The outlook is uncertain, but appears likely to disappoint relative to earlier hopes of a rapid rebound.
The Bureau of Census has recently released results of a couple of experimental surveys to gauge the real-time economic effects of the coronavirus and the efforts to contain it: a Small Business Pulse Survey and a Household Pulse Survey. Each has a set of tables and an interactive feature which allows comparisons across states and industries. These figures will be updated every Thursday. The Household Pulse Survey confirms what was already suggested by the anecdotal information. All income sectors have experienced a loss of labor income through this crisis, with lower- income households experiencing the worst.
Weekly jobless claims fell further in the week ending May 16, but the level remains extremely elevated. Investors have begun to turn their attention to continuing claims, which are reported with a lag. Continuing claims can be hard to interpret. A decline could signal job growth, but it can also signal an exhaustion of benefits. Claims were still rising in the week ending May 9, to over 25 million. Extended benefits are set to expire at the end of July. It’s unlikely that we’ll see a huge surge in job offerings through the end of the year.