Job Losses, Stocks Soar

This morning’s jobless claims report came in at 2,123,000. Remarkable, this is the eighth improvement to that number in a row.

Also, the Q1 GDP report was revised lower. The initial report had been for -4.8%. Today that was revised down to -5%.

Economists believe the lockdowns that shut wide swaths of the economy and triggered the layoffs of millions of workers will send the GDP sinking at an annual rate of 40% in the current quarter. That would be the biggest quarterly decline on records that go back to 1947. It would be four times the size of the previous decline set back in 1958.

Many forecasters believe growth will rebound sharply in the July-September quarter with the Congressional Budget Office predicting GDP will rise at an annual rate of 21.5%. Still, that gain would not be nearly enough to make up for the economic output that was lost during the first and second quarters.

At the end of July, we’ll get our first look at the Q2 GDP report. It will be historically terrible.

We also got the durable goods report this morning, and for the second straight month we saw a large drop. For April, durable goods fell by 17.2%. That’s on top of a 16.6% drop for March.

The stock market is up again today. The S&P 500 has been as high at 3,052 this morning.

Posted by on May 28th, 2020 at 11:02 am


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