But the government’s official job report, released Friday, will provide one of the most comprehensive insights into these economic spinoffs. By all accounts, it should be a scary report, showing that layoffs have increased and unemployment hit levels of the Great Depression in April.
The report, which will be released by the Bureau of Labor Statistics at 8:30 a.m.ET Friday, will inform policymakers as they continue to respond to the crisis, and document how workers’ home orders have hurt Americans. .
Economists polled by Refinitiv expect the US economy to cut 21.85 million jobs in April, by far the largest number on record. Monthly U.S. government employment data dates back to 1939.
Combined with the job losses in March, the layoffs in April would wipe out all the jobs gained in the past decade. Between March 2010 and February 2020, the US economy created 22.8 million jobs, according to the BLS.
Government economists estimate that the unemployment rate peaked at 24.9% in 1933.
The unemployment rate climbed to 4.4% in March, which was already a sharp increase from the nearly 50-year low of 3.5% in February, but far from the peak expected for this year.
White House economist Kevin Hassett predicts unemployment could reach 20% in April, he said on Tuesday.
“We are probably looking at the worst unemployment rate since the Great Depression,” Hassett told CNN’s Poppy Harlow.
We will not have a complete picture of the severity of the pandemic for the job market until next month, said Marvin Loh, senior global macro strategist at State Street. Employment growth will likely resume by Memorial Day as businesses in many parts of the United States begin to reopen, Moody’s Analytics chief economist Mark Zandi noted in a research report this week.
Some states are already beginning to relax the restrictions, while others will take longer to open and re-hire.
Economists are also concerned about whether consumers will spend as they did after the big reopening. Consumer spending typically accounts for about two-thirds of the US gross domestic product, the largest measure in the US economy. A more careful consumer who spends more time at home could leave the restaurant and entertainment industries – and their workforce – to recover more slowly, said David Kelly, global chief strategist at JPMorgan Funds.
Foreshadowing unemployment claims
The Covid-19 epidemic has ravaged America in the past two months. People started working from home as much as possible in the second half of March, as businesses closed and schools suspended teaching in person. As the lockout continued, companies fired and laid off staff.
A separate report, released Wednesday by payroll processor ADP, found that private employers cut 20.2 million jobs in April. Although the ADP report and the BLS surveys are not directly linked, economists and investors see the ADP survey as an indicator of what is to come in the BLS jobs report.
In recent weeks, economists have followed with concern the weekly jobless claims, which include people who are claiming unemployment benefits for the first time. Since mid-March, that number has risen to 30.3 million, or about 18.6% of the March labor force.
Another three million initial requests are expected for the week ending May 2. The report is due Thursday at 8:30 am ET.
Unemployment claims do not determine the official unemployment rate, however, which is based on a separate survey of around 70,000 households which ends around the middle of the month. But the explosion of complaints indicates that the US labor market is in a critical situation.
People are only counted as “unemployed” by the BLS when they have been unemployed but available for a new job, as well as actively looking for work, in the previous four weeks. Or, if they were on “temporary layoff” with the hope of being called back to work within six months.
But in the current crisis, millions of unemployed Americans will not look for new jobs, given business closings and home orders.
This means that many people who are laid off will not be counted in the unemployment rate for April.