A grim new record

THU, APR 02, 2020

YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC

AS OF THU, APR 02, 2020 • 12:10 ET

DJIA		21312.87
		+1.76%	+369.36

S&P 500		2518.07
		+1.93%	+47.57

NASDAQ		7480.35
		+1.63%	+119.76

EDITOR'S NOTE

I wrote last week about how the jobless claims report was about to become the single-worst economic data point in U.S. history. And it was.

But that didn't last long. This morning, the weekly claims data more than doubled to set a sobering new record, with 6.6 million new claims filed. Remember all those charts last week that showed that huge spike in claims? It's going to look even more shocking now. That means about 10 million new unemployment claims have come in during just the past two weeks. There were only about 11 million filed all of last year!

And that 10 million is likely to double or more in the coming weeks, especially now that a broader set of workers--including freelancers and "gig economy" workers--are, for the first time, eligible to claim benefits. It makes Friday's "official" March unemployment report, frankly, pretty irrelevant. The survey week for the report was March 12th. That's ancient history.

But remember, like both Rick Santelli and Steve Liesman have been saying over the past 24 hours: we chose this. We emphatically did not choose to experience the financial crisis a decade ago. The economy then collapsed under its own unsustainable weight. This time, we chose a "sudden stop"--a term typically reserved for commodity-dependent emerging economies--to save hundreds of thousands of souls from perishing from the coronavirus. So yes, the data is going to be really, really bad for awhile.

Bank of America's new projection is that second-quarter GDP will plunge 30% (annualized), the third quarter will be -1%, and we won't get growth again until the fourth quarter. They now see 16 to 20 million job losses and the unemployment rate peaking over 15%. We all saw the St. Louis Fed "guesstimate" of a 32% peak unemployment rate the other day. Larry Summers yesterday on CNBC said he thinks second-quarter GDP could be -50%.

The only good thing about numbers that bad are that it will--hopefully--be hard to get a lot worse from here.

See you at 1 p.m...

Kelly

Kelly Evans
Twitter: @KellyCNBC

Instagram: @realkellyevans

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