Bloomberg is reporting the following from Goldman Sach Group Inc. on jobless claims:
Filings for U.S. unemployment benefits are poised to surge to a record 2.25 million this week, according to a Goldman Sachs Group Inc. analysis of preliminary reports across 30 states.
With businesses shutting down because of coronavirus-containment efforts, jobless claims are already climbing — by 70,000 to 281,000 for the week through last Saturday, Labor Department data showed Thursday. That was the biggest increase since Hurricane Sandy in 2012. The level Goldman projects for the week through March 21 is more than triple the prior peak of 695,000, in 1982.
“Many U.S. states have reported unprecedented surges in jobless claims this week,” economist David Choi wrote in a note late Thursday. “While it is possible that claims were front-loaded to start off the week — implying a slower pace of claims for the week as a whole — or that our sample is biased toward states with a larger increase in claims, even the most conservative assumptions suggest that initial jobless claims are likely to total over 1million.”
There is a claim from Bank of America that it could be as high as 3 million.
I’ve been trying to do some of the math on what this means for the unemployment rate, which Trump loves to tout like the stock market values. I may be wrong in my math, but bear with me. Currently there is 5.8 million unemployed and a 3.5% unemployment rate. This means there is nearly 166 million American workers in the workforce. The unemployment rate is calculated by dividing the number of unemployed by the workforce (employed and unemployed) and multiplying by 100.
If we only lost a million jobs this month, the unemployment rate would be approximately 4.1%.
If Goldman Sachs is correct, the unemployment rate will be 4.8%.
If Bank of America is correct, the unemployment rate will be 5.3%.
The unemployment rate when Trump took office was 4.7%. If Goldman or Bank of America are correct in their estimates, the rate will be worse than when Trump took office.
My calculations may be off, so please feel free to check my math.