U.S.: Massive churn in the jobs market - ING

James Knightley, the Chief International Economist at ING, notes that this week’s jobless claims numbers provide a bit of a mixed picture of what is happening in the jobs market. 

"Initial claims fell pretty much as expected to 1.54m the week of June 6 from 1.90m the previous week. However, continuing claims declined more slowly than hoped to 20.9m from 21.3m (consensus was looking for a figure of 20.0m)."

"Continuing claims are falling as consumer-facing businesses call back staff as the re-opening process gains momentum. The slow rate of decline may reflect that the uprating of unemployment benefits with the extra US$600 per week from the government stimulus plan means that to return to work would leave many people financially worse off. Indeed, the University of Chicago estimates that 68% of benefit claimants have higher incomes now than when they were working."

"However, the stresses caused by the Covid-19 crisis continue to spread through the broader economy, such as supply chains and professional services. Companies are finding that revenues and profits are not rebounding as quickly as hoped and are being forced to lay-off staff, meaning initial jobless claims remain elevated. This is likely to keep initial jobless claims running above 1 million for a few weeks longer."