Unemployment Highest Since Great Depression*

Unemployment reaches 14.7%. It’s a sobering headline, but it could be worse. As the BLS explains…

Due to the impact of the COVID-19 pandemic, the relationship between the two was no longer stable in April. Therefore, the establishment survey made modifications to the birth-death model.

If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical April) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been almost 5 percentage points higher than reported (on a not seasonally adjusted basis).

In other words, actual unemployment (U-6) is nearly as high as the 24.9% registered during the Great Depression.

Since the futures have already ramped 30 points (50 points from overnight lows) higher… …on the usual nightly collapse in VIX……we’ll have to wait until the cash market opens to see whether or not carbon-based investors agree that 85-year highs in unemployment are insignificant.