Here’s How Bad The U.S. Labor Market Gets Whacked This Week
The U.S. government will release its jobs numbers tomorrow for new unemployment claims. The labor market is going to get whacked again.
It might not look as bad as the roughly 6.6 million who filed claims the week before, double the number who had filed a week before that, but investment firms are already willing to up the ante on their unemployment claims bets.
On Wednesday, Barclays said it now expects jobless claims to come in at 5.5 million for the week ending April 4, up from its previous estimate of 4.5 million. READ MORE
IN CANADA – Women, younger workers bear brunt of one million job losses in March
Canada lost a record-setting number of jobs in March with the damage set to worsen as COVID-19 wreaks havoc on the economy and triggers steep layoffs, particularly for women, young people and lower-wage workers.
Statistics Canada said Thursday that slightly more than one million people lost their jobs in March, easily the largest one-month decline in data that go back to 1976. The unemployment rate climbed to 7.8 per cent, from February’s 5.6 per cent, marking a record increase. READ MORE
The economic data is even worse than Wall Street feared: ‘The economy is clearly in ruins here’
How The Unemployment Rate & Manufacturing Index Affects Everybody
- The unemployment rate is the proportion of unemployed persons in the labor force.
- Unemployment adversely affects the disposable income of families, erodes purchasing power, diminishes employee morale, and reduces an economies output.
- The Manufacturing on the other hand will destroy companies earnings and push unemployment further to the south
Importantly, unemployment even affects those who are still employed. When workers are let go, it increases the amount of work those who are still employed have to cover. And because unemployment usually increases when companies are trying to cut costs, those expected to pick up the slack are not receiving any additional compensation for extra hours worked. Unemployment can also have a negative mental effect on those who are still working. They may become more concerned about losing their jobs or be hesitant to look for something better because they “are lucky” to be employed at all.
WHAT ABOUT THE PHILIPPINES?
BSP cuts policy rate to record low –
THE BANGKO SENTRAL ng Pilipinas (BSP) fired off another 50-basis-point (bp) cut in policy rates in an off-cycle meeting to bring borrowing costs to record lows in a bid to boost lending to support the economy in the middle of the coronavirus disease 2019 (COVID-19) crisis.
“BSP cut key policy rate by 50 bps,” BSP Governor Benjamin E. Diokno told reporters in a Viber message on Thursday. The reduction will take effect today (April 17).
“This is to strongly encourage lending to various sectors, especially to the most vulnerable, amid the COVID-19 pandemic,” he said on Twitter.
This brought the key rate or the overnight reverse repurchase rate to 2.75%. Accordingly, interest rates for the central bank’s overnight deposit and lending facility have been trimmed to 3.25% and 2.25%, respectively. READ MORE
All this actions by BSP is a sign that the worst is yet to come and the central banks are scrambling to find a solution; I am sure they will find a way – but the recovery is going to be a slow one and not immediate.
Shipping time bomb ticks as thousands of Filipino sailors get stuck
VENCITO U. OPEN, 31, is one of about 50 Filipino seamen who have been stranded in a cramped dormitory in San Andres — Manila’s second-most densely populated district — jobless and about to become penniless after his flight to Saudi Arabia was canceled when the government locked down the main Philippine island of Luzon to contain a novel coronavirus pandemic.
The building owner had threatened to close the two-story dorm after many of them missed their daily rent of P80 and for fear that the virus could spread among the transients, the messman from Cagayan de Oro province said. READ MORE. This is juts one situation but if you look a macro picture the worst is on its way if the lock-down extends further.
Extending lockdown beyond April could be ‘difficult’ — Pernia
EXTENDING the enhanced community quarantine (ECQ) beyond April 30 would be “difficult,” according to Socioeconomic Planning Secretary Ernesto M. Pernia, who is backing a gradual lifting of the Luzon-wide lockdown which would allow malls and public transportation to resume partial operations.
“I guess there will be some lockdown and probably it will be more localized, not like now which is the whole of Luzon, and some loosening up in some areas, that have low risk of COVID-19 contagion will be opened up, will be unquarantined,” Mr. Pernia told BusinessWorld Wednesday when asked for his recommendations after the ECQ ends on April 30.
However, Mr. Pernia said in a radio interview with DZMM it would be hard to extend the Luzon-wide lockdown, as many business groups have been calling for a “partial reopening” with safety measures in place. Read More
- Cash is King; keep Cash and wait for opportunities
- Don’t rush but check your charts for Technical Approach
- Buy Companies based on Value, future earnings, relevant and valuation
- Understand fundamentals & look for signs of recovery
- No vaccine; No Rush