Market Insights

06/05/20 08:10 AM EDT

CHART OF THE DAY: April Employment By Education Level

Christian Drake

Below is a chart and brief excerpt from today's Early Look written by Macro analyst Christian Drake.

April’s consumption collapse was inclusive of unprecedented and non-recurring Social Benefit payments. A discretionary spending cratering that occurred despite millions and millions of individuals not having to make auto, credit card or mortgage payments. What happens on the other side of that?

Importantly, the scope of any structural damage will only take shape progressively given the potential for a temporal cascading of impacts.

That is, while the initial shock was concentrated among those sectors and workers with direct front line exposure (younger-workers with less education in lower-wage service industries like Leisure/Hospitality and Retail Trade), the extent to which protracted demand destruction (and the roll-off of support measures) catalyzed metastasizing job loss up the income and white-collar hierarchy – with respect to both managerial positions in those front-line sectors themselves and in sectors immediately adjacent – would take time to become evident.

To the extent those 2nd order labor effects do, in fact, materialize they should will only begin to manifest now and will be occurring alongside what should be fledgling improvement in the Continuing Claims data. A shift in the distribution of job loss will be important to monitor in this morning’s NFP data.

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