It’s not immediately clear if there’s much utility in sifting through the smoldering ashes of the worst jobs report in the history of modern economic statistics.
“Today’s report is horrible”, ING said, flatly, in a quick postmortem.
Start there (i.e., with “horrible”), open your thesaurus, and select from the synonyms. Any of them will be applicable.
Read more: Great Depression II – 20.5 Million Jobs Lost In Worst Ever Payrolls Report
And yet, given that this is history in the making, and, more importantly, considering these aren’t merely numbers, but are in fact people whose lives have been turned upside down overnight, it’s incumbent upon us all to at least say a little something at what amounts to a funeral for America’s labor market.
The simplest way to go about this given the across-the-board nature of the carnage, is simply to go category by category.
Retail was devastated, as shops closed and consumers were homebound. 2.1 million jobs were lost in the sector. Clothing and accessories was wiped out.
The lone bright spot was “general merchandise”, which benefited from a rush to warehouse stores and supercenters, as Americans stocked up for the viral apocalypse.
In manufacturing, where an astounding 1.3 million jobs were lost during the survey period, durable goods accounted for two-thirds of the drop.
For obvious reasons, motor vehicles and parts suffered a body blow. (Do note that the chart below includes some double counting, but I break out the figures to give you a more granular look.)
Leisure and hospitality was a total wipeout. This is no surprise given the nature of the crisis and it’s been documented at every conceivable turn over the course of the nationwide lockdown. Still, the numbers are staggering.
7.7 million jobs were lost in the sector from March to April. 5.5 million of those were in food services and drinking places.
Do attempt to empathize: If you’ve been to a restaurant or a bar this year, there is a very good chance that both the person who served you and the person who prepared your meal is now jobless. When you go back to that establishment (assuming you choose to leave the house), it may be closed – for good.
The breakdown in education and health services helps shed some light on the seemingly “strange” decline in healthcare spending that showed up in Q1 GDP data (figure below).
Dentist offices dropped more than a half million jobs from March to April, while physicians’ offices bled nearly a quarter million. The huge drop in social assistance (a total decline of 651,000 positions) comes down to the collapse of the day care industry, shown in the visual.
Other notables from the report include a massive 801,000 drop in local government payrolls, reflecting school closures. Nearly a quarter of a million positions were lost in real estate, rental and leasing. And more than 200,000 jobs disappeared in motion pictures and sound recording.
Unfortunately, we haven’t seen the worst of this.
“The data will continue to deteriorate”, ING laments. “Social distancing, consumer angst, travel restrictions and the legacy of up to 40 million jobs lost mean there is zero prospect of a V-shaped recovery”.
Don’t tell US stocks though. “Markets had priced an awful report”, TD’s Priya Misra remarked on Friday as equities surged on Wall Street.
Oh but the comparisons are gonna’ look fabulous for a long time to come when all this data finally turns around… Same game Rosy Scenario lives !!!! Call all this graveyard humor for want of a better term….
Not sure if we are witnessing a short squeeze today but the market is clearly overlooking the likelihood of extended social distancing which will unfortunately result in permanent job losses. City centers like New York and L.A. are not going to be the same anytime soon as the white collar crowd opts to work remotely, likely through the end of this year. And don’t forget about all of those deferred event/airline/cruise/etc. tickets that are not being refunded but will be transferrable to future use. No credit card refunds = even higher delinquency rates from those unable to pay bills due to furloughs turning into permanent job losses. Oh, and some are still trying to file for unemployment after weeks of trying. What an unmitigated disaster.