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We're gonna need a bigger boat...

03 April 2020

The March US non-farm payrolls (-701k versus estimates of -100k) and unemployment rate (4.4% versus estimates of 3.8%) from the Bureau of Labour Statistics released on 3 April were perhaps only marginally pointless in helping anyone make sense of the employment crisis now developing in the US. Being delayed data, and only capturing part of the monthly change in March, it does not illustrate the likely calamity in the US jobs market as the more recent weekly initial unemployment claims that we saw on 2 April but it was much worse than expected nonetheless. The weekly initial unemployment claims showed us that close to 10 million Americans have filed for unemployment benefits in the last two weeks alone – this indicates the unemployment rate in the US is close to 15%, a level not seen since the Great Depression. So for once, this change in the number of employed people during the previous month (excluding the farming industry) means absolutely nothing to markets. Everyone expects that next month’s report will represent the louder banging of the nail into the US recession coffin. Expect extra additional fiscal stimulus to follow.

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