Terrible data, day two
EDITOR'S NOTE
Here's what you need to know: the Philly Fed regional manufacturing index plunged to -56.6 (for early April). Housing starts (i.e., new construction) slumped 22% in March from the month before, although new permits were only down about 7%. And another 5.2 million new jobless claims were filed last week, for more than 22 million total so far.
There's a lot of talk that jobless claims are "peaking" since the number of new claims is lightening up each week, but is that really news? The stock market knew that a couple weeks ago. We talked about it with J.P. Morgan's Jesse Edgerton on April 6. I wouldn't count it as good news. It's just a mathematical fact.
I think economist Stephen Stanley makes a good point that 22 million new claims probably understates the need, since (a) processing backlogs mean not all the new claims filed have even been counted yet, and (b) many who filed have not actually received checks yet because the systems are overwhelmed.
On the flip side, Stanley says, we can hope that some of those who already filed claims have been or will be called back to work now that the small biz relief is being paid out; they might also get work elsewhere (like at Instacart). Indeed, the national dialogue is turning towards "reopening," even if that'll be an extremely slow and halting process.
Starbucks is preparing to reopen some locations already, after closing to all but delivery and drive-thru on March 21. We'll be speaking with Congressman Greg Murphy, an advocate of gradual reopening, about this on The Exchange today (and with Josh Bolten, the CEO of the Business Roundtable, in Power Lunch).
The only thing worse than a fitful reopening, in my view, is a continued shutdown. Already meat processing plants are going offline, and the mail is a mess because of personnel absences. We can't say: nothing happens until we have a vaccine, because the supply shortages and work stoppages will get much worse. More businesses will close for good, more jobs will be lost, this downturn risks becoming a depression.
It has to be more like: we're all staying as safe as we can while keeping the economy functioning as much as possible.
On that note, I'll see you at 1 p.m!
Kelly
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