The global economy is shutting down.
And while we’ve chronicled both the pre-coronavirus state of the economy and some early indications on how much activity is likely to slow, Thursday will offer an early glimpse at the state of the U.S. labor market.
And it’s not going to be good.
At 8:30 a.m. ET Thursday morning, the Bureau of Labor Statistics will release its weekly report on initial filings for unemployment insurance. In recent weeks, initial claims have still been fairly stable and haven’t yet reflected any notable stress due to the coronavirus.
But recent data flagged by the teams at Renaissance Macro and Bespoke Investment Group suggests a sharp rise in claims is likely in the weeks ahead.
“Two key data points we found today are making us nervous about the national labor markets,” said Bespoke Investment Group in a note to clients published Tuesday night.
For one, the volume of Google searches for “unemployment benefits” has surged and is consistent with weekly claims topping 800,000, according to Bespoke.
Additionally, data from Ohio suggests the nationwide hit to the labor market and the surge in claims could be even more severe.
“We also got data from Ohio via a report from Senator Portman’s office,” Bespoke said Tuesday. “[T]hat data cited 6,500 new claims last week but more than 40,000 this week, enough to send new claims to the second-highest level ever. If Ohio is consistent with the national labor market, that would mean more than 1 million claims.”
Bespoke notes that it’s unlikely the Ohio data track perfectly nationwide, given that the state has closed restaurants and bars this week while many states have not taken that step.
But with increasingly aggressive measures being taken by lawmakers at both the state and federal level to curb public gatherings, the nation could look more like Ohio in short order.
And so while the national claims data published tomorrow won’t capture the full impact of what we’re starting to see in some states and via Google search trends, the labor market is clearly cracking and the coming weeks will only start to capture the full impact of this economic slowdown.
Myles Udland is a reporter and anchor at Yahoo Finance. Follow him on Twitter @MylesUdland
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