One of the ugliest data in the COVID-19 era is turning: The morning brief

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Friday, April 16, 2021

Initial receivables are slowly starting to string together

When the COVID-19 pandemic hit the U.S. economy abruptly in the winter of 2020, one of the first economic points to hit the enormous scale of the looming catastrophe was the initial weekly demand for the unemployed.

For the week ending March 21, 2020, initial claims rose sharply to record levels as blockades boosted the labor market. At its peak in April 2020, more than 6 million Americans applied for unemployment benefits for the first time in one week. And for 20 weeks in a row, more than a million people have filed initial unemployment claims.

But as the economy reopened and the vaccine continued to be introduced, life slowly began to normalize in the United States. We are now beginning to see signs that this data – after remaining stubbornly high for months – is starting to moderate, finally.

On Thursday, we learned that for the week ending April 10, about 576,000 Americans have applied for unemployment insurance. That is the lowest number since the week that ended on March 14, 2020, when the pandemic first began to stifle the economy.

Last week, for the first time since the beginning of the pandemic, the number of people applying for unemployment insurance fell below the peak of 665,000 weekly claims seen after the financial crisis.

“We expect the demand trend to decline as the labor market recovery takes off,” said Nancy Vanden Houten, a leading U.S. economist at Oxford Economics. “The four-week moving average will be a better roadmap for the trend, and last week the four-week moving average fell 47,250 to 683,000, also the lowest since March 14, 2020.”

Certainly, some data from Thursday reflect the impact of Easter, and economists expect that data could return in the coming weeks. In addition, in March, total employment in the United States was still more than 8 million below the February 2020 level. In short, the recovery of the labor market still has a very long way to go.

The claims data series was, and still remains, one of the noisiest. While my colleague Emily McCormick was tagging Thursday, economists at JPMorgan suggested last weekend that the number of recent requests could be inflated.

“Historically, about 45% of initial receivables resulted in the first benefit payment,” JPMorgan economist Michael Feroli said in a note. “In the last few months, less than 25% of initial claims have generated the first compensation payment. Why is that? One reason may be that paying a $ 300 bonus a week encourages more people to apply – payment from a successful lawsuit is significantly higher than before the pandemic. “

And with the latest data on continuous unemployment claims – recorded by people who have registered and received at least one week of unemployment insurance – still at 3.7 million, labor market trouble remains.

But some of the darkest clouds hovering over the U.S. employment picture are really looking to clear up.

By Myles Udland, reporter and anchor for Yahoo Finance Live. Follow him on @MylesUdland

What to watch today


  • 8:30 am ET: The housing starts, March (1.613 million expected, 1.421 million in February)

  • 8:30 am ET: Building permits, March (1.750 million expected, 1.720 million in February)

  • 10:00 AM ET: Consumer sentiment at the University of Michigan survey, April preliminary (expected 89.0, 84.9 in March)


  • 6:20 AM ET: Citizens Financial Group (CFG) it is expected to report adjusted earnings of 97 cents per share with revenue of $ 1.65 billion

  • 6:30 am ET: Bank of New York Mellon (BK) it is expected to report adjusted earnings of 88 cents per share with revenue of $ 3.85 billion

  • 6:45 am ET: PNC Financial Services Group (PNC) it is expected to report adjusted earnings of $ 2.71 per share with revenue of $ 4.12 billion

  • 7:30 AM ET: Morgan Stanley (COM)MRS) it is expected to report adjusted earnings of $ 1.68 per share with revenue of $ 13.95 billion

  • 7:30 AM ET: State Street Corp (STT) it is expected to report adjusted earnings of $ 1.34 per share with revenue of $ 2.88 billion

  • 7:30 AM ET: Ally Financial (COM)ALLY) it is expected to report adjusted earnings of $ 1.17 per share with revenue of $ 437.08 million

  • 8:00 AM ET: Kansas City Southern (COM)KSU) it is expected to report adjusted earnings of $ 1.94 per share with revenue of $ 707.29 million

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