In about an hour 7:30 CST we are going to see something we have never seen before....
With the COVID-19 starting to take significant hold of the U.S. economy I believe this week we will see a massive rise in
ICSA
that will translate to massive unemployment. My current estimates are anywhere from four to eight million if you use Canada as a proxy. This is 5 to 10 times the largest known weekly claims data (700K) and is a direct result of the precautions made for COVID-19. I don't believe this number is anywhere close to being "priced in" and will take the market.
Why?
As of the February's Employment Situation Report the total unemployment rate was 3.5% with 5.787M people unemployed and 158.759M employed for a total civilian labor force of 164.546M.
If you input my most conservate estimate of 4M newly unemployed people, developed off Canada's already published data, that would shift unemployed people to 9.787M. Assuming there isn't a large shift in the civillian labor force, that would change the unemployement rate from ~3.5% to ~5.9% in effectively one week. If that trend continues, as it usually does, we would see unemployement definantely surpassing the 2009 GFC of 10% and we could reach or even surpass the peak from the Great Depression of 24.9%.
I know that there has been a few articles on this printed over the past couple of weeks but most of my "non trading" friends weren't even thinking about the level of unemployment COVID-19 will cause. Also when this news hits new outlets it will make every working american pause, take notice, and become fearful that they too may lose their job. I think this because it is how I feel and it is a real possibility I lose my job like many other hard working people.
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS
Estimates for 3/26
4-8 million
Last week 3/19
281,000
Report Link
Stay safe....
just_a_guy
Disclaimer: The opinions and ideas presented by just_a_guy are for informational and educational purposes only and should not be construed to represent trading or investment advice.
With the COVID-19 starting to take significant hold of the U.S. economy I believe this week we will see a massive rise in
ICSA
that will translate to massive unemployment. My current estimates are anywhere from four to eight million if you use Canada as a proxy. This is 5 to 10 times the largest known weekly claims data (700K) and is a direct result of the precautions made for COVID-19. I don't believe this number is anywhere close to being "priced in" and will take the market. Why?
As of the February's Employment Situation Report the total unemployment rate was 3.5% with 5.787M people unemployed and 158.759M employed for a total civilian labor force of 164.546M.
If you input my most conservate estimate of 4M newly unemployed people, developed off Canada's already published data, that would shift unemployed people to 9.787M. Assuming there isn't a large shift in the civillian labor force, that would change the unemployement rate from ~3.5% to ~5.9% in effectively one week. If that trend continues, as it usually does, we would see unemployement definantely surpassing the 2009 GFC of 10% and we could reach or even surpass the peak from the Great Depression of 24.9%.
I know that there has been a few articles on this printed over the past couple of weeks but most of my "non trading" friends weren't even thinking about the level of unemployment COVID-19 will cause. Also when this news hits new outlets it will make every working american pause, take notice, and become fearful that they too may lose their job. I think this because it is how I feel and it is a real possibility I lose my job like many other hard working people.
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS
Estimates for 3/26
4-8 million
Last week 3/19
281,000
Report Link
Stay safe....
just_a_guy
Disclaimer: The opinions and ideas presented by just_a_guy are for informational and educational purposes only and should not be construed to represent trading or investment advice.