As of March 28, the U.S. Department of Labor reports that the insured unemployment rate is now 5.1%. The previous week's level was revised up by 219,000 from 6,648,000 to 6,867,000. The 4-week moving average was 4,265,500, an increase of 1,598,750 from the previous week's revised average. The previous week's average was revised up by 54,750 from 2,612,000 to 2,666,750.
Amidst the newsest unemployment data, Redfin has announced that it will cut 7% of its staff and furlough hundreds of agents due to decreased housing demand amid the COVID-19 crisis. Redfin CEO Glenn Kelman announced that a majority of its workforce will be furloughed until September 1.
“We still have had to furlough people today because of a downturn, but it wasn’t because we didn’t try to trade growth for job security,” Kelman wrote. “Every year, we’ve hired about 25% fewer agents than could be supported by the demand from Redfin.com, so that even if demand fell 25%, our workforce would still be at 100% productivity. Now housing demand is down much more than that.”
Doug Duncan, Chief Economist at Fannie Mae, commented on the impact of the latest employment data.
“While individual state-level data for the current week should be considered preliminary estimates, Georgia showed the highest increase, rising 250,000 from the previous week. However, some large states that have been hit exceptionally hard by the outbreak, such as California and New York, showed declines, though still remain at extremely high levels,” Duncan noted.
“As with the prior week, a few caveats make this week’s data difficult to interpret precisely. On one hand, UI eligibility rules have been relaxed recently, increasing the number of people who are able to apply,” Duncan continues. “This makes it difficult to estimate the uninsured unemployed share of the workforce. On the other hand, many states reported a significant backlog of UI applications due to a lack of processing capacity, indicating that this week’s release may understate the true extent of insured layoffs. The recently enacted CARES Act is intended to help mitigate some of the negative shock to the labor market.”