Every Thursday we get a bit more insight into the job market, and today is no different.
Workers File 2.4 Million Unemployment Claims
Workers filed an additional 2.4M unemployment claims last week, a slight drop-off in the wave of historically high weekly filings since the economic fallout from COVID19.
Here’s a picture to put more perspective around what I’m talking about –
Note: the totals exclude hundreds of thousands of self-employed and gig-economy workers receiving unemployment benefits for the first time through a temporary COVID19 related program.
As of Tuesday, 43 states are paying out unemployment benefits to the newly eligible workers – Arizona mailed out unemployment checks to 165,000 people early last week. New Jersey processed 135,000 unemployment applications between April 26 and May 9 – dayum!
The worst part is most of these states are using outdated technology to process these applications – only slowing down the process. Hopefully they’ll be able to process everyone they need to sooner rather than later.
Coronavirus Widens Retail Divide, Leaving Macy’s and Victoria’s Secret Behind
Macy’s expects $1B quarterly loss & Victoria’s Secret planning to close 250 North American stores
COVID19 is widening the divide between retailers that are drawing in shoppers vs. those that are losing business – department stores and apparel retailers are feeling the most pain. On Thursday, Macy’s offered a glimpse of the damage wrought by the virus saying that first-quarter sales fell by as much as -45% and that they’re expecting a record ($1B) operating loss when it reports financials July 1.
Victoria’a Secret said sales fell by -37% and that they would close about a quarter of their North American stores. Kohl’s reported a -41% drop in sales in Q1 & TJX (Marshall’s, TJ Maxx, etc.) reported $5B in sales disappearing.
You know who’s not self-destructing? Best Buy. They were able to make up for closed stores with online orders and curbside pickup and were able to retain 81% of last year’s sales during the last 6 weeks of the quarter – this is without a single customer stepping into a store. I think it’s so cool when a company can be agile and react with solutions like that – cheers to Best Buy.
Quick note on JC Penney who filed for bankruptcy protection this month and plans to close about 240 stores (30% of locations) – 1,000 JCP customers were asked where they’d shop if their local JCP was closed and 1/3 answered Target and another 1/3 answered Walmart. Both publicly traded as $TGT and $WMT.
U.S. Existing-Home Sales Dropped 17.8% in April
Sales of previously owned homes plunged in April, as COVID19 shut down much of the country’s economic activity and sellers and buyers staying on the sidelines.
Existing-home sales dropped -17.8% in April, the biggest monthly decline since July 2010. Previously owned home make up most of the housing market. Economists surveyed by the WSJ expected a -19.5% decline.
Why did this happen?
Stay-at-home orders prevented real-estate agents from showing homes in person in some states – couple that with widespread job losses and tightening credit requirements and you’re looking at a recipe for large declines.
Despite the number of transactions declined, home prices continued to rise as sellers opted to take their houses off the market or wait until later to sell them. Supply and demand – this caused median existing-home prices to rise +7.4% from a year earlier to $286,800.
NAR’s Chief Economist Lawrence Yun said “Price appreciation in the +7% range is unhealthy. The only way for price growth to slow is to get more listings and also more home construction.”
Existing-home sales fell the most in the West, at -25%, and in the South, at -17.9%.
Has this impacted any of you? Anyone you know? I have a friend that’s currently looking for a house and is no longer qualified for her original mortgage amount due to tightening credit restrictions. Share your experiences in the comments below.