The eagerly awaited U.S. jobless claims figure came in at 6.6 million for the week ending March 28, missing analyst expectations of 3.5 million and rising from 3.3 million in the prior week. The record-breaking figure underscored the extent of the damage caused to the U.S. economy by the coronavirus pandemic.
Reactions from the world’s leading economic minds highlighted the severe implications of the latest jobless claims release. Mohamed A. El-Erian, chief economic adviser to Allianz (DE:ALVG) tweeted: ‘6.648 million! Another huge jump in US weekly jobless claims. Another indication of the virus’s devastating immediate and longer-term effects on social/economic/financial well being. Also serves as a reminder of the difficulties of aligning collective/individual corporate interests.’
Nobel laureate Paul Krugman gave some perspective of the figure as it relates to the 2008 crisis, tweeting: "10 million new claims for unemployment insurance over 2 weeks. That’s around 20 times the normal rate, and understates actual job losses. For comparison, 9 million jobs lost in the Great Recession."
U.S. stock index futures and USD/JPY traded lower in the initial reaction to the release before rebounding. Equity markets and USD/JPY weakened on Wednesday following President Donald Trump’s unsettling press conference late on Tuesday. Investors were rattled after Trump warned Americans to prepare for a “very, very painful two weeks.” The White House also projected that the coronavirus pandemic could claim 100,000 to 240,000 lives, even if social distancing precautions are followed.
U.S. stock index futures were boosted early on Thursday by a jump in oil prices. Crude oil, a proxy for global economic prospects, jumped after Trump said he expects Saudi Arabia and Russia to reach an agreement over their price war. The rebound comes after WTI crude oil prices fell to the lowest levels in 18 years on March 30th.
Data from Johns Hopkins University shows that coronavirus COVID-19 global cases have risen to 951,901, with 48,320 fatalities. The death toll in Spain passed 10,000 on Thursday, after both the United Kingdom and the United States reported their highest number of deaths in a single day on Wednesday. While there are indications that infections in Italy may be slowing, cases are still rising in many countries, including the United States.
Investors now look to Friday’s U.S. employment report. Analysts are expecting a drop of just 100,000 in nonfarm payrolls, but this is because the data only runs up to March 12th.