initial jobs claims over forecast, again - Printable Version
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initial jobs claims over forecast, again - Mick - 06-04-2020
Weekly jobless claims totaled 1.877 million last week against DJ estimate of 1.775 million. Continuing claims rose sharply, hitting 21.487 million as against 20.838 million the prior week.
https://www.dol.gov/ui/data.pdf
https://www.cnbc.com/2020/06/04/weekly-jobless-claims.html
Riots might be helping the economy. Definitely speeding the end of social distancing. Urban riot damage will need brobdingnagian repairs. Statistics may point to an April bottom, and wouldn't that be great.
https://www.fxstreet.com/analysis/riots-could-assist-us-recovery-by-ending-the-economic-paralysis-202006040246
RE: initial jobs claims over forecast, again - BostonCard - 06-04-2020
What you are describing is the well-known parable of the "broken window fallacy" or the "glazier's fallacy"
https://www.investopedia.com/ask/answers/08/broken-window-fallacy.asp
Money spent repairing the damage can't be used for something else. Even if it is insurance money, it will mean higher insurance premiums in the future, which will sap businesses of cash flow they will need to recover. And for the businesses that don't come back, boarded up, unoccupied buildings will drag down property prices long after we've moved onto the next news cycle. It took decades for riot-affected areas in LA to recover after the Rodney King riots.
https://www.huffpost.com/entry/twenty-five-years-after-the-flames-why-are-there-still_b_58fcb1d2e4b0f420ad99c8cd?guccounter=1
Many shops and restaurants, already reeling from COVID-19, may decide that having their property destroyed is the last straw. Or maybe they simply don't have the capital to repair and reopen. This is an awful one-two punch to a lot of businesses that might have been reopening or on the verge of reopening.
BC
Note, I think taking a position on the underlying reasons for the violence is beyond the scope of this board. I am just talking about the economic consequences to the affected areas.
RE: initial jobs claims over forecast, again - Mick - 06-04-2020
(06-04-2020, 09:43 AM)BostonCard Wrote: What you are describing is the well-known parable of the "broken window fallacy" or the "glazier's fallacy"
https://www.investopedia.com/ask/answers/08/broken-window-fallacy.asp
Money spent repairing the damage can't be used for something else. Even if it is insurance money, it will mean higher insurance premiums in the future, which will sap businesses of cash flow they will need to recover. And for the businesses that don't come back, boarded up, unoccupied buildings will drag down property prices long after we've moved onto the next news cycle. It took decades for riot-affected areas in LA to recover after the Rodney King riots.
https://www.huffpost.com/entry/twenty-five-years-after-the-flames-why-are-there-still_b_58fcb1d2e4b0f420ad99c8cd?guccounter=1
Many shops and restaurants, already reeling from COVID-19, may decide that having their property destroyed is the last straw. Or maybe they simply don't have the capital to repair and reopen. This is an awful one-two punch to a lot of businesses that might have been reopening or on the verge of reopening.
BC
True if velocity = 0.
I'm making the assumption that the money could be used through accelerating velocity. The businessperson pays the glazier, who pays the rent and salaries and raw materials, and each of those have greater ability to pay, etc.