One of the economic data that increased in importance during the coronavirus crisis is the weekly unemployment claims in the United States.
Presented every Thursday for the previous week, it shows the number of people that apply for the first time for unemployment benefits.
Up until the pandemic, the market participants focused more on the Non-Farm Payrolls data. Not anymore, as the need grew to find out sooner the changes in the labor market’s evolution.
Yesterday’s data beat expectations slightly, but it failed to support the USD. In fact, on the better than expected release, the USD continued its slide.
Tectonic Changes Taking Place on the U.S. Labor Market
The United States labor market differs from other developed countries. It is one of the toughest in terms of competition, while employees do not benefit from the same assistance as in Europe, for example.
In other words, losing a job in the United States is, for many people, equivalent to losing health care benefits. For this reason only, the job market’s competitiveness is tougher than anywhere in the world.
The COVID-19 pandemic brought more than a recession. In a way, it resembles a world war, but this time a war with everyone involved. So far, the two world wars took place in some parts of the world, while others delivered goods for the battling forces. This time, everyone is affected, as the global pandemic has the power to change everything we know so far. It even has the power to change the U.S. labor market.
According to Indeed, an online job advertiser and recruiter, job seekers become more and more interested in long-term remote work options. Since Twitter and Facebook announced plans for permanent remote work, the number of searches grew, showing interest in such options.
Working from home cannot fully substitute the work in person. However, in some cases, especially for online businesses, it represents a viable solution moving forward. Unsurprisingly, out of the millions of Americans that apply for unemployment benefits every week, it is unlikely that they come from online businesses.
All-in-all, the report was better than expected, but it emphasizes the long road ahead to recovery. Because of that, the market participants were not impressed by the data, and the USD selling continued unabated.