It is still all about jobs

Posted by: Paul Donovan

03 Apr 2020
  • Yesterday's US initial jobless claims numbers were not good. Over the last two weeks, the US unemployment rate must have increased 6% or more. Today's employment report is survey based (which presents problems) and will have missed later job losses. The data increases pressures to speed up the transmission of fiscal stimulus, and to do more fiscal stimulus.
  • The damage of unemployment is that it risks lengthening phase one (the demand shock). To move to phase two (the bounce back), governments need to stop trying to lower GDP, and companies and consumers need to be ready to support growth. Unemployment is a signal of the readiness of companies and consumers.
  • The Trump Twitter Feed suggested an imminent cut in oil production had been agreed between Russia and Saudi Arabia. The oil price rallied very strongly. Russia denied talking with Saudi Arabia. The oil price has given up some of its gains.
  • Various business sentiment opinion polls are due (focused on the service sector). You have to be a pretty unusual person to fill in a survey in this situation, which may create a bias – we do not want the views of unusual people to be presented as the views of the majority.

Explore more CIO Daily Updates