WTF Just Happened in Pennsylvania, Minnesota, and Ohio?!
We watch unemployment closely due to the close correlation with consumer and small business loan defaults. Here’s something I noticed.
Huge unemployment number this morning. Initial claims were at 2.9 million, not seasonally adjusted (might as well work with “real” numbers). While that is a staggering number in itself, let’s dig in to the where and the why.
To set a baseline, here are the initial claims for the last three weeks.
Digging in, let’s sort by the multiple increase from this week to last week. Also included is the rank from the prior week. Washington already had a significant jump the week of 3/14, so it sets a better baseline on a few states. We’ll stick with that going forward. Highlighted are the four states commonly watched most closely. They have the most outright number of CV cases. They have a right to freak the F out.
Next, let’s take a look at the number of cases as a % of the states population. CV case density gives any of these states at the top the right to freak the F out. Are we overreacting in California?
Finally, let’s look back at unemployment again and sort by initial claims as a percentage of the state population. Rhode Island, sorry you’re small. Nevada, kind of small. But, Pennsylvania, WTF?! You just laid off 378k people and the number of cases there is still quite light all things considered. That’s more than the next two highest states combined (California and Ohio, with a total population of 5x your size). Minnesota, you barely have any CV cases and you laid off more than Illinois, a state 2.5x your size and with much higher population density issues in Chicago. (New Hampshire…small.) Ohio!
This leads me to one question and one conclusion.
- Q: Why the significant layoffs in certain states? I definitely get the freaking the F out factor. The only idea I have is that these are supply chain states and the supply chain died really quickly. Please shoot me a tweet or comment on this with other ideas, curious what you think.
- C: There are a lot more unemployment initial claims coming this week. Put CV cases and case density aside. Let’s assume it’s everywhere now. If we flip the second chart and look at states where there was relatively light increase in claims, I would imagine there is a lot more room there for pain. States like Georgia, Arizona, Texas, Illinois, and Florida all have decent populations and all had lighter than average initial claims last week.