US jobless claims leap as Covid-19 slams hospitality and transportation across many states

First time unemployment claims in the US leaped last week as the Covid-19 coronavirus disrupted activity across the accommodation, food and transportation sectors. According to the Department of Labor, initial jobless claims increased by 70,000 over the week ending on 14 March to reach 281,000. Consensus had been expecting 225,000.

The four-week moving average, which aims to smooth out the volatility in the data from one week to the next, roe by 16,500 to 232,250. Secondary unemployment claims, which are those that are not being filed for the first time and referencing the week ending on 7 March, edged up 7,000 to 1.701m. “A number of states specifically cited COVID-19 related layoffs, while many states reported increased layoffs in service related industries broadly and in the accommodation and food services industries specifically, as well as in the transportation and warehousing industry, whether COVID-19 was identified directly or not,” said the Labor Department.

Commenting on the latest figures, Ian Shepherdson, chief economist at Pantheon Macroeconomics said: “The consensus was a bad joke but the initial hit from bar and restaurant closures was bigger still than we expected.

Next week’s number, however, will be an order of magnitude worse.

“Media reports from around the country make it clear that claims have rocketed since bars and restaurants started to close in large numbers over the weekend, in some cases buy a factor of 10 or more.”

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