Barely Gettin By

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What's going on?

Workin nine to five, what a way more than three million Americans used to make a livin: data out on Thursday showed the most ever filed for unemployment benefits last week.

What does this mean?

The 3.28 million Americans who filed for unemployment wasnt just a massive jump from last weeks two-and-a-half-year high: it also eclipsed economists forecasts and made the previous record of 695,000 set during the Great Depression look like small potatoes (tweet this).


While the speed and magnitude of job losses mightve come as a surprise, the overall rise in unemployment didnt. Coronavirus has led to the closure of hotels, gyms, and restaurants, and the latter alone as Americas second-largest private employer boasts a 16 million-strong workforce. With an estimated fifth of the US workforce currently on lockdown, rising unemployments an unavoidable consequence.

Why should I care?

The bigger picture: Up-to-data.


A lot of economic data is backward-looking, which means the economic situation will already have changed by the time analysts get a handle on it. But jobless claims reports are different in that they rapidly reflect current economic conditions. Investors are keenly aware of that too, which might be why stocks initially rose after Thursdays report: a bigger-than-expected drop in employment now could mean were closer to the trough and therefore to an eventual economic recovery.



For you personally: The b is silent.


Several governments have stepped up to cushion coronaviruss impact on workers. The British government, for example, is paying 80% of salaries, while the US is sending cash to every man, woman, and child. Thats necessary partly because the average Brit has less than one months salary set aside for emergencies, and 20% of Americans dont save anything at all. In a crisis, then, lots of people invariably turn to short-term debt like credit cards. Which is fine just as long as youre not racking up interest payments.

Originally posted as part of the Finimize daily email.

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