E3: Record jump in US jobless claims expected as Covid-19 hits economy - business live

Rolling coverage of the latest economic and financial news, as investors brace to learn how many Americans lost their jobs last week

Oof! Confidence among German consumers has hit its lowest level since the financial crisis.

Data firm GfK’s monthly survey of morale in Europe’s largest economy has slumped to just 2.7, down from 8.3 in March.

“In light of the current development, we are withdrawing our consumer forecast of one percent growth for 2020. Retailers, manufacturers and service providers must prepare for a recession.

How severe this recession will be will ultimately depend on when the economy finds its way back to normality. A reliable forecast regarding consumption can only be made once we can predict how long the protective measures to combat corona will remain in place.”

#Germany GfK consumer sentiment looks like it just ran head first into a brick wall pic.twitter.com/6A2y6m0UCj

Paul Donovan of UBS Wealth Management says that today’s US jobless claims reading is very important, but may not be terribly accurate:

US initial jobless claims numbers are expected to be very, very large.

If lots of Americans lose their jobs, the start of phase two (economic bounce-back) will be delayed. More unemployed means less consumption. Today’s data may have accuracy issues, if there were not enough people to process and count the number of claims.

Economists surveyed by Reuters predict that around a million US citizens filed jobless claims last week (including Citi’s forecast of 4 million).

As their chart shows, that would smash the previous record from the 1980s (when the US has hiked interest rates to squish inflation, at the cost of many jobs).

“Containment efforts in response to the coronavirus resulted in a very sudden and very dramatic change over just a few days,”

“Layoffs were part of that change and applicants appear to have flooded state unemployment insurance offices within a very short time-span.

European stock markets have all opened in the red, as investors brace for today’s grim US jobless figures.

In London, the FTSE 100 has dropped by 166 points, or 2.9%, handing back some of Wednesday’s 242-point gains.

After a nice recovery over the last few days, investors will be wondering whether the selling is about to resume again in this near market.

With a growing number of countries in lockdown and the virus still spreading rapidly in Europe and the US, it is very difficult to be optimistic about the global economic outlook despite all the large monetary and fiscal stimulus measures announced by various governments and central banks over the past couple of weeks.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Jobless claims expected to spike to a record-breaking number in the millions. https://t.co/t4NpuktFPx pic.twitter.com/iAn1YO2YAM

“It’s the tip of the iceberg, and they’re going to be ugly. It depends on the speed at which the claims were filed, and the next week will probably be worse,”

This will be the first shock and awe. ... It’s terrifying, but it’s why nobody is going to tell Congress they did too much.”

US futures dipping lower this morning.....#DOW 20847 -1.66%#SPX 2435 -1.75%#NASDAQ 7366 -1.44%#RUSSELL 1077 -2.67%#FANG 2833 -2.15%

Good morning early birds and goodbye two-day rally #markets

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