June 3, 2020
Recessions take some time to run their course due to a negative feedback loop that runs from weak labor markets to weak consumer growth to weak corporate profits to weak labor markets. The labor market is most important and the reason economists focus on weekly jobless claims and monthly labor statistics from the BLS. Tomorrow brings weekly jobless claims for the week ending today with consensus looking for 1.8M claims, down from 2.12M last week. Also good to keep an eye on ‘continuing claims’ that surprised some people last week by improving to 21.05M. Friday brings the official May Jobs report from the BLS with consensus looking for 8M job losses vs 20.5M in April. The Unemployment Rate is expected to rise further to 19.5% in May vs. 14.7% in April. And investors will be watching the participation rate closely after it collapsed to 60.2% in April (consensus looking for 60.1% this month).