Yippee jobless claims drops, just because the market dropped to panicky investors doesn’t mean the economy is crashing

Main Street Strong – U.S. Weekly Jobless Claims “Unexpectedly Drop

Posted by sundance

The stock market is not the U.S. economy. The stock market is an investment instrument.

Yes, the downstream consequences from coronavirus mitigation efforts means there is likely going to be temporary, very specific, fluxes within the Main Street economy. Entertainment, hospitality and leisure are likely to see the strongest initial impacts. However, as noted by the release of weekly jobless claims the U.S. economy is very strong.

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits unexpectedly fell last week as employers continued to hold on to their workers.

Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 211,000 for the week ended March 7, the Labor Department said. Jobless claims are the most timely labor market indicator. They have declined for two straight weeks.

Economists polled by Reuters had forecast claims rising to 218,000 in the latest week. (link)

The cancellations of large public gatherings, events and venues will have some impact on independently employed workers and ancillary businesses connected to them. That’s the purpose of the extended and targeted administration effort for financial assistance in very specific sectors. However, in the aggregate the Main Street economy is still very strong.

Numerous pundits fail to understand the difference between strong financials in the banking sector (Main St), and the downturn experienced in the stock market (Wall St). Cue the audio visual demonstration:

The stock market is Wall Street, an investment instrument. The banking sector has strong liquidity and is more connected to Main Street. The banks are stable; this is not a financial crisis.

https://theconservativetreehouse.com/2020/03/12/main-street-strong-u-s-weekly-jobless-claims-unexpectedly-drop/#more-186208