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PMI and Jobless Claims Highlight COVID-19’s Economic Impact

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  • On Thursday, the April flash PMI data and weekly jobless claims data were released. Both the data points reveal COVID-19’s economic impact.
  • Meanwhile, after the crash in March, US stock markets have recovered somewhat from their lows.

PMI data amid COVID-19

On Thursday, IHS/Markit released the flash PMI data for April. Notably, the preliminary numbers were released. The final figures will be out in about a week. Regardless, the data show COVID-19’s economic impact.

The US flash composite PMI fell to 27.4 in April from 40.9 in March—an all-time low for the reading. The services PMI also fell to an all-time low of 27.0. Meanwhile, the manufacturing PMI fell to 36.9 in April—the lowest level since the Great Financial Crisis.

Key takeaways from the April flash PMI survey

In the PMI release, Chris Williamson, the chief business economist at IHS/Markit, said, “The COVID-19 outbreak dealt a blow to the US economy of a ferocity not previously seen in recent history during April.” He also said, “The deterioration in the flash PMI numbers indicates a rate of contraction exceeding that seen even at the height of the global financial crisis, with jobs also being slashed at a rate far exceeding anything previously recorded by the survey.”

Weekly jobless claims worse than expected

As if the April flash PMI data wasn’t scary enough, the weekly jobless claims came in at 4.4 million, which was worse than analysts’ expectations. Over 26 million Americans have filed for unemployment claims over the last five weeks. The US economy has shed more jobs in the last five weeks than it has added since the Great Financial Crisis.

The flash PMI figures and the jobless claims data confirm recent fears. COVID-19 is the worst economic crisis that we’ve seen in our lifetime.

Durable goods and consumer sentiment index today

Today, we’ll get the March durable goods orders data and April consumer sentiment index data. Notably, the durable goods data has been dismal over the last few years. Businesses have shied away from capex amid uncertainty due to the US-China trade war. After the PMI and weekly jobless data, these two data points will reveal the economic harm caused by the COVID-19 pandemic.

COVID-19’s economic impact

Looking at China’s example, the economic recovery is also swift after the pandemic is controlled. China’s manufacturing PMI moved above 50 in March, which indicates an expansion in manufacturing activity. Chinese stock markets are also outperforming US stock markets this year. While the Dow Jones Index (NYSEARCA:DIA) has recovered this month, it’s still down sharply for the year. Read COVID-19 Impacts US Stock Markets and Economy to learn more.

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