March 26, 2020
This report is the tip of the iceberg in terms of bad economic data as the coronavirus (COVID-19) closures cascade through the US economy.

What Happened

Initial weekly jobless claims soared by 3.00 million to 3.28 million for the week of March 21. The prior record was 695,000 back in October 1, 1982. On a state level, the biggest jumps were: Pennsylvania (378,900), Ohio (187,800), California (186,800), Texas (155,657), New Jersey (155,454), Massachusetts (147,995) and Michigan (129,300). Despite having roughly half of the US confirmed coronavirus cases, initial claims in New York rose to 80,300, not nearly as much as we would have expected.

Bottom Line

The speed of the spike in jobless claims is, of course, unparalleled in US history. This report is the tip of the iceberg in terms of bad economic data. Jobless claims, along with all other economic data, will continue to deteriorate as the coronavirus (COVID-19) closures cascade through the US economy.

That said, the speed and size of the fiscal and monetary responses are equally unprecedented. For comparison sake, the fiscal stimulus package for the Great Financial Crisis was $787 billion, or 5.5% of US gross domestic product (GDP). The just-passed fiscal stimulus package is $2.2 trillion or 9.3% of GDP. Similarly, on the monetary side, the Federal Reserve (Fed) initially began buying $700 billion in US Treasuries and mortgage-backed securities in the first six months of the Great Financial Crisis and upped the amount two more times over the course of the next two years. In 2020, the Fed announced $700 billion in bond buying, which it bought over the course of a few days, and then said it would make unlimited amounts of purchases. While these measures will not stave off a US recession, they will certainly help to blunt the downside.

Lastly, while the speed of the spike in jobless claims is certainly unnerving, it does offer the possibility that the downturn will be concentrated rather than being spread out for months over a year or longer, as occurs during the typical recession. Likewise, given the massive fiscal and monetary responses, it might hasten the recovery.


This material was provided by SunTrust Private Wealth Management for use by BB&T Wealth.

Advisory managed account programs entail risks, including possible loss of principal and may not be suitable for all investors. Please speak to your advisor to request a firm brochure which includes program details, including risks, fees and expenses.

SunTrust Private Wealth Management is a marketing name used by Truist Financial Corporation and the following affiliates: Banking products and services, including loans and deposit accounts, are provided by SunTrust Bank and Branch Banking and Trust Company, both now Truist Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank and Branch Banking and Trust Company, both now Truist Bank and SunTrust Delaware Trust Company. Securities, brokerage accounts and /or insurance (including annuities) are offered by SunTrust Investment Services, Inc., BB&T Securities, LLC, and P.J. Robb Variable Corp., which are SEC registered broker-dealers, members FINRA, SIPC, and a licensed insurance agency where applicable. Investment advisory services are offered by SunTrust Advisory Services, Inc., GFO Advisory Services, LLC, BB&T Securities, LLC, Sterling Capital Management, LLC, Precept Advisory Group, LLC, and BB&T Institutional Investment Advisors, Inc., each SEC registered investment advisers.  BB&T Sterling Advisors, BB&T Investments and BB&T Scott & Stringfellow are divisions of BB&T Securities, LLC. Mutual fund products are advised by Sterling Capital Management, LLC.

While this information is believed to be accurate, SunTrust Banks, Inc., now Truist Financial Corporation, including its affiliates, does not guarantee the accuracy, completeness or timeliness of, or otherwise endorse these analyses or market data.

The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but Truist Financial Corporation makes no representation or guarantee as to their timeliness, accuracy or completeness or for their fitness for any particular purpose. The information contained herein does not purport to be a complete analysis of any security, company, or industry involved.  This material is not to be construed as an offer to sell or a solicitation of an offer to buy any security.

Opinions and information expressed herein are subject to change without notice. STIS and/or its affiliates, including your Advisor, may have issued materials that are inconsistent with or may reach different conclusions than those represented in this commentary, and all opinions and information are believed to be reflective of judgments and opinions as of the date that material was originally published.  STIS is under no obligation to ensure that other materials are brought to the attention of any recipient of this commentary. 

Truist personnel are not permitted to give legal or tax advice.

Investments involve risk and an investor may incur either profits or losses. Past performance should not be taken as an indication or guarantee of future performance.

STIS/STAS shall accept no liability for any loss arising from the use of this material, nor shall STIS/STAS treat any recipient of this material as a customer or client simply by virtue of the receipt of this material.

The information herein is for persons residing in the United States of America only and is not intended for any person in any other jurisdiction.

Investors may be prohibited in certain states from purchasing some over-the-counter securities mentioned herein.

The information contained in this material is produced and copyrighted by Truist Financial Corporation and any unauthorized use, duplication, redistribution or disclosure is prohibited by law.  

STIS/STAS’s officers, employees, agents and/or affiliates may have positions in securities, options, rights, or warrants mentioned or discussed in this material.

Asset classes are represented by the following indexes. An investment cannot be made directly into an index.

S&P 500 Index is comprised of 500 widely-held securities considered to be representative of the stock market in general.

©2020 Truist Financial Corporation. BB&T, SunTrust®, the SunTrust logo, and Truist are service marks of Truist Financial Corporation. All rights reserved

CN2020-0730 EXP12-2020