The much anticipated jobless claims data for US workers came out early Thursday morning. Unsurprisingly, the jobless claims skyrocketed to a record 3.28 million. This data represents the claims lodged during the week ending March 21. According to the US Department of Labor, this marks an increase of 3 million initial claims from the number recorded the previous week.
Highest jobless claims on record but underwhelms projections
Since the US DOL began recording these numbers, the highest level ever recorded was 695,000 38 years ago. In addition, the US DOL noted that during the week ended March 14, unemployment filing recorded the largest single-week jump since the 2007/08 crisis. Despite the astonishing numbers, there is little surprise among economists. Before the data came out, economists at CITI were expecting the data to top 4 million. Meanwhile, UBS analysts were anticipating nothing more than 860,000. Clearly, the sudden stop in the US economy because of the COVID-19 pandemic is massive.
Interestingly, the US dollar index appeared to be in a general decline ahead of the jobless claims data. From midnight Thursday 26 to 07:26 AM EDT, the DXY gave up 0.7% of its value. Clearly, this is an indication that the market was unsure of what to expect, given the grim forecasts from analysts.
The DXY could slide further
The DXY notched up 0.4% between 07:26 AM EDT and 08:34 AM EDT to 100.42. Surprisingly, this is just about the time the DOL released record initial jobless claims data. Since the data speaks volumes about the extent to which the COVID-19 pandemic has battered the US economy, one would expect the DXY to decline. Nevertheless, the DXY later.
Economists surveyed by Bloomberg that the jobless claims data could be a harbinger of the worst that is yet to come. The head of US economics at Bank of America, Michelle Meyer, told Bloomberg that the data implies the nature of the current downturn is unusual. As such, Americans should expect higher numbers going forward. Certainly, the DXY would lose more ground if this were to happen.