Stock futures turned positive after much better-than-expected U.S. unemployment data was released. New filings for U.S. unemployment benefits last week totaled 1.186 million, the lowest level since the prolonged COVID-19 shutdowns began. Wall Street had been expecting more than 1.4 million.
The level for the week ended Aug. 1 represented a drop of 249,000 from the previous period.
Amid worries that the employment picture was faltering after two record-breaking months of job creation, the claims number indicates some momentum. Continuing claims, or those who have collected benefits for two straight weeks, dropped by 844,000 to 16.1 million.
Markets reacted positively to the news, with Dow futures shaving almost all of their earlier losses as stocks looked to open about flat.
The last time the weekly claims number was this low was March 14, just as the coronavirus hit pandemic status and the U.S. economy came to a standstill in an effort to halt the spread. The totals since then have easily eclipsed anything seen before in records going back to 1967.
The four-week moving average, which smooths volatility in the numbers, fell by 413,250 to 16.6 million. But the damage to the labor remains deep and this was the 20th consecutive week that claims have run above 1 million.
MacDailyNews Take: Correction to Cox’s erroneous assertion that “the U.S. economy came to a standstill in an effort to halt the spread.” The effort wasn’t/isn’t so much to “halt” the spread, but to slow it so that medical facilities would/will not be swamped, i.e. “flatten the curve.”
Purple Curve: Social distancing measures applied starting from point (0). Same number of total cases (volume under curve) but much lower peak, longer duration. pic.twitter.com/dElnFdXSbv
— Jeremy TEST/TRACE/ISOLATE – NO SHORTCUTS Konyndyk (@JeremyKonyndyk) March 8, 2020
Bill Hanage, an epidemiologist at the Harvard T.H. Chan School of Public Health, [said], “Slowing it down matters because it prevents the health service becoming overburdened. We have a limited number of beds; we have a limited number of ventilators; we have a limited number of all the things that are part of supportive care that the most severely affected people will require.”
In a country whose government is unlikely, or unable, to impose draconian limits on freedom of movement as China did, such voluntary measures may be the best countermeasure. The reason isn’t that it will stop the virus; it’s likely the same number of people will ultimately still get sick. But it could mean the difference between a manageable surge of patients and one that overwhelms scarce resources, resulting in unnecessary deaths. — The Washington Post, March 10, 2020
At the beginning of an outbreak, many cases that are very severe can overwhelm the health care system. The health care system depletes its resources and deaths increase. If we plot those cases on a graph, we see a large spike. However, if we can instead spread that same number of cases over a longer period of time, the health care system has time to replenish its resources to continue to respond. — Cherise Rohr-Allegrini, infectious disease epidemiologist, March 14, 2020
Apple’s share price is up slightly in pre-market trading, +$0.65 (+0.15%), to $440.90.