The worst US jobs report in modern history is in the books.
The numbers are staggering, even as they were expected.
20.5 million American jobs were lost in April, a figure that is orders of magnitude worse than the previous record set in September of 1945, following the end of the second world war.
The previous month’s headline figure (which showed 701,000 jobs lost in the March survey period), was revised higher to 870,000.
The headline number for April validates what most observers had already surmised based on the number of Americans filing for unemployment benefits over the last seven weeks. Nearly all of the jobs created over the course of the longest US expansion on record were wiped off the board in a single month.
On Thursday, the latest weekly figures showed another 3 million Americans filing, bringing the running total of jobless claims stemming from the crisis to nearly 34 million.
The unemployment rate more than tripled to 14.7%, a record in data going back some 75 years. Just three months ago, it was sitting at a five-decade nadir.
Some economists expect the jobless rate will eventually top levels seen during the Great Depression, amid an ongoing deluge of jobless claims, and as uncertainty surrounding the post-COVID economic reality makes employers reluctant to rehire workers, despite hundreds of billions in government assistance designed to stanch the bleeding. Indeed, the number would already be higher if workers counted as absent from work due to other reasons had been classified as unemployed on temporary layoff.
Private payrolls fell 1.95 million. Manufacturing payrolls contracted a stunning 1.3 million. Government payrolls fell 980,000, with local governments dropping 801,000 positions.
The leisure and hospitality industry lost 7.7 million jobs during the survey period. That is a 47% drop. Last month, the BLS noted that the employment decline in the sector offset gains over the previous two years. Friday’s figures underscore the notion that the US services sector is facing an existential crisis. Food services and drinking places lost 5.5 million jobs.
Average hourly earnings surged, as lower-paid jobs disappeared. The MoM gain was 4.7%. On year, earnings rose 7.9%. “The increases in average hourly earnings largely reflect the substantial job loss among lower-paid workers”, the BLS notes.
Earlier this week, a commensurately grim ADP report found businesses with between 1 and 499 employees shed 11.3 million positions from March to April.
April’s jobs report is, quite simply, the single worst top-tier economic data print in modern history. There is no precedent whatsoever.
The Trump administration is reportedly rushing to cobble together a package of measures that can be implemented without congressional approval in a bid to support the economy further ahead of the election. Some surveys suggest half of America’s small businesses may be gone by the time voters go to the polls (or mail in their ballots) in November.
Lawmakers, meanwhile, are keen to work towards another massive package of aid for the stricken US economy, but the usual partisan rancor means a final deal will take time to develop. Time is something the millions of newly jobless, not to mention the president, are demonstrably short on.
The US economy contracted sharply in the first quarter and will shrink the most in history in the April-June period.
Aides and advisors to the Oval Office told NBC this week that the administration isn’t going to “shy away” from the numbers. As I put it on Thursday evening, you have to own it if you’re the president. Even when it’s not your fault.
As much as Trump doesn’t hew to the notion that “the buck stops here”, it always does. Especially in election years. And America is now in a modern day depression.
But wait a minute here. I saw a headline declaring that the 14.7% was good because expectations were at 15.2% !!
How anyone came up with the 15.2% estimates is not clear, but it was A BEAT!!
This is commonly known as the analyst expectations game…very easy to rig the results as no one every pays any attention to the original ‘guess’ only the beat or rare miss…..
Yep. I also wonder if there is a big options strike at 2900? If expiring soon, it’ll stay pegged around it as longs try to squeeze out their last pennies.
All those low wage workers are going to be surprised to see their wages even lower when they do finally get another job offer. It’s going to be interesting and scary to see what happens with those wages over the next year.
And with lower wages, a corresponding drop in consumption. I’m not a pro, but a big rise in consumption this year just doesn’t seem to be in the cards.
The only real question is whether PayDay Lenders will be eligible for the SBA and Fed Main St programs.
They already are.