Jobless Claims on Downward Slope to 3.169M Last Week

Thursday, May 7, 2020

As most every Thursday in the course of a calendar year, the now-dreaded Initial Jobless Claims were released ahead of today’s opening bell. For the past several weeks, these bleak figures have been pointing in real-time to the economic struggles happening in the wake of “shelter in place” tactics to slow the spread of the deadly COVID-19 coronavirus. They set a shudder-inducing record in the last week of March of 6.9 million new claims, but have thankfully tapered down from there.

New initial claims registered 3.169 million, above the 3.10 million expected by analysts but beneath the previous week’s 3.84 million. So in the ongoing mission to find silver linings, we do see a downward slope on these weekly numbers, with hopes they will slide faster as parts of the U.S. economy begin to reopen. That said, it’s taken 7 weeks for our economy to lose a whopping 33.5 million jobs, with millions more coming in the weeks ahead.

Continuing Claims, which reports a week in arrears, still has yet to see the crest of this wave: 22.647 million ongoing jobless claims came in two weeks ago. This is up strongly from the 18 million reported the previous week. On CNBC’s “Squawk Box” this morning, analyst Steve Liesman reports there may be some underreporting in the continuing claims data, particularly for Florida — while COVID-19 cases climb in the state, somehow longer-term jobless claims fell by nearly 260K from the previous week. This may be an error in reporting or it may be a sign of difficulties in fulfilling these claims. Either way, it’s not a good picture.

Looking for more good news (such as it is)? Nonfarm Q1 Productivity came in much better than anticipated at -2.5%; expectations had been for a drop of 5.5%. Yes, it still counts as a multi-year monthly low, but nowhere near the all-time record -11.7%, which came post-World War II. Productivity was also down from the +1.2% reported in Q4, but this has not only been baked into the market, it’s now ancient history.

Unit Labor Costs also came in better than expected: +4.8% versus the +5.5% expected. Still, this is higher than the +0.9% reported in the previous quarter, but again — no surprises here. If there is one takeaway from these quarterly figures, it’s that ramifications from coronavirus quarantine have had less impact than expected. For now, that is; these numbers are likely to get much worse a quarter from now.

Zacks Rank #2 (Buy)-rated Bristol Myers-Squibb BMY posted strong Q1 results in both earnings and sales this morning: $1.72 per share easily outpaced the $1.48 per share, and $10.78 billion topped by 8.6%. Revenues also stormed past the $5.92 billion reported a year ago. Shares had been trading down 4.8% year to date — still an improvement over the S&P 500’s -11.8% — and have climbed 2% during the early trading session. For more on BMY’s earnings, click here.

JetBlue JBLU and Anheuser Busch InBev BUD both missed quarterly expectations: JetBlue by a penny on the bottom line to -42 cents on a 6% negative surprise on the top-line to $1.59 billion, while BUD also posted -42 cents per share, well off the -18 cents expected, on $11.0 billion in sales, which fell 10% year over year.

For more on JBLU’s earnings, click here.
For more on BUD’s earnings, click here.

Mark Vickery
Senior Editor

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