Daily Memo: US Unemployment, European Coronabonds

U.S. unemployment figures are about to get ugly.

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Unemployment in the U.S. is about to skyrocket. Public panic over the coronavirus outbreak in the U.S. really set in only around the middle of last week. Companies, however, were worried much sooner. Initial jobless claims jumped by 70,000 last week – the largest spike since 2012 – to 281,000, according to U.S. Labor Department data released on Thursday. This week’s figures will be much uglier: A Reuters survey of economists forecasts as many as 1.5 million new claims, almost triple the U.S. record. Goldman Sachs is predicting 2.25 million. A poll by SurveyUSA, meanwhile, suggests around 9 percent of the U.S. workforce (14 million people) won’t take home a paycheck this week, while another quarter are working reduced hours. The staggering economic and social implications of the coronavirus outbreak in the U.S. are only beginning to become clear. Coronabonds. European Commission President Ursula von der Leyen indicated Friday that the European Commission is ready to consider backing common eurozone debt issuance in the form of “coronabonds.” Calls from several capitals to mutualize debt have been growing in recent days, and it’s not a significant surprise that the European Commission would get behind the idea. But the real obstacle is in […]

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