April 9, 2020
Chief Economist Scott Brown discusses the latest market data.
Initial claims for unemployment benefits totaled 6.61 million in the week ending April 4, down from 6.87 million in the week before. Prior to seasonal adjustment, 15.1 million people have filed claims in the past three weeks – that’s 9.2% of the labor force – and the figures understate the degree of job losses (as not every laid-off worker can file a claim).
The UM Consumer Sentiment Index fell to 71.0 in the mid-April reading, down from 89.1 in March and 101.0 in February. It was the largest decline on record. The report held a cautionary tone, indicating that sentiment would likely fall further in the weeks ahead.
In an online conference call through the Brookings Institute, Fed Chair Powell displayed a calm demeanor. While his initial comments seemed to be little more than hand-holding, showing steady leadership is an important role for the Fed in these times. He addressed a number of questions about the impact of COVID-19 and what the Fed is doing.
Next week, jobless claims will remain the key economic data report to watch (these figures are timely and relatively accurate). Retail sales results for March are likely to be horrible (with the decline magnified by the seasonal adjustment). The Index of Leading Economic Indicators will post a huge drop, reflecting declines in most components, but especially from the increase in jobless claims.
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