Devastating Jobs Report For April Will Show Impact Of Virus

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WASHINGTON (AP) – The US government is about to release the worst job set since the recordkeeping began in 1948, a snapshot of the devastating damage the economy has caused the coronavirus epidemic on Friday.

The unemployment rate for April could reach 16% or more, according to economists polled by the data provider FactSet. Twenty-one million jobs may have been lost. If so, it would mean that almost all of the job growth in the 11 years since the end of the Great Recession has disappeared within a month.

Even these figures do not fully reflect the extent of the damage that the coronavirus has done to jobs and income. Many people who are still active have had their hours reduced. Others have suffered wage cuts. Some who lost their jobs in April and have not looked for a new one in light of their bleak outlook will not even be considered unemployed. A broader measure – the proportion of adults in employment – could reach a record high.

The scale of the job loss has been breathtaking.

During the Great Recession of 2008-2009, the country lost 6.5% of its jobs over a two-year period. It was the worst loss in any recession since World War II. Yet in April alone, the projected job loss of 21 million would represent 14% of all jobs, more than double.

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The impact on individuals has been considerable. One of the new unemployed, Sara Barnard, 24, from St. Louis, lost three jobs: a floor manager in a pub and restaurant, a bartender in a small downtown tavern, and the occasional comedian. His main job was at McGurk’s, an Irish pub and restaurant near the city center that closed a few days before St. Patrick’s Day. She had worked there continuously since high school.

McGurk tried to sell food by the roadside, said Barnard, but it cost more to keep the place open than the money that came in. .

McGurk’s is a landmark of St. Louis, and Barnard expects it to rebound quickly after it reopens. She just doesn’t know when.

Job losses and wage cuts vary around the world. Unemployment in the 19 euro area countries is expected to exceed 10% in the coming months as more people are laid off. This figure is expected to remain below the US unemployment rate. But there are not many people who are either on leave or reduced hours but who receive most of their salary from government assistance.

In France, about half of the workforce in the private sector benefits from a public paid vacation program which allows them to receive up to 84% of their net salary. In Germany, 3 million workers are covered by a similar system, the government paying up to 60% of their net salary.

In the five weeks covered by the US employment report for April, 26.5 million people claimed unemployment benefits. Job losses to be reported on Friday may be less because the two are measured differently: The government calculates job losses by surveying businesses and households. It’s a net number that also counts the hires that some companies, like Amazon and many grocery stores, have made. In contrast, the total number of jobless claims is a measure of the layoffs alone.

For the United States, a key question is where does the job market go from here. Unemployment claims, although high, have declined for five consecutive weeks, indicating that the worst layoffs have passed. Yet few economists expect a rapid turnaround.

The Congressional Budget Office has forecast that the unemployment rate will still be 9.5% by the end of next year. An article by economists at the San Francisco Federal Reserve estimates that in an optimistic scenario that assumes the closings are lifted quickly, the unemployment rate could fall to around 4% by mid-2021.

But if the closures recur and hiring picks up more slowly, the unemployment rate could stay double-digit until the end of 2021, according to economists at the San Francisco Fed.

Raj Chetty, a Harvard economist, tracks real-time economic data, including consumer spending, hiring small businesses and job vacancies. Chetty noted that the health of the economy will depend on when the viral epidemic has diminished enough for most Americans to feel comfortable returning to restaurants, bars, cinemas and stores.

The data suggests that many small businesses hold on to the hope that spending and the economy will rebound soon, he said. The wage bill for small businesses has dropped significantly, but has stabilized in recent weeks. And the job vacancies have not decreased as much as the total number of jobs. But it is not yet known how long these trends will persist.

“There’s only time you can hold,” said Chetty.

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