The official jobs report will be one of the “ worst ” ever in US history after 20.2 million rolls have been cut
Friday’s official jobs report will be one of the “ worst ” in US history, a Federal Reserve bank boss has warned.
James Bullard, president of the St. Louis Fed, said CNBC the “unemployment rate will be extremely high,” adding, “We think 20 percent is not unlikely, could even be higher.”
His grim warning came two days before the official monthly job statistics from the U.S. Labor Department are released. Economists think Friday’s report will reveal that unemployment in the United States is at least 16 percent, down from 4.4 percent in March.
A Wednesday report from payroll company ADP said US companies cut an unprecedented 20.2 million jobs in April.
The massive drop in US private payrolls for April, reported on Wednesday, is “no surprise,” but employment could recover dramatically in the second half of the year if the coronavirus pandemic is kept under control, Bullard said.
He said “it could fall to double digits by the end of the year,” if economic aid programs work well and the virus is adequately controlled.
James Bullard, president of the St. Louis Fed, told CNBC Friday’s official jobs report will be one of the “worst ever” in US history
Bullard added, “You also have this PPP program, which has encouraged companies to keep their employees on their payroll even though they don’t do that much business.
“It is not surprising. It is a pandemic. It is a shutdown situation. ‘
In November last year, President Trump raved about a job creation blowout record, Trump tweeted GREAT JOBS REPORT! ‘
But the Wednesday report from payroll company ADP showed the tragic depth and magnitude of job losses that left no part of the world’s largest economy unscathed.
The losses are likely to continue through May, and recruitment recovery is likely to begin in the coming months, said Mark Zandi, chief economist at Moody’s Analytics.
“This is one for the record books,” said Zandi. “The good news is that we are at the top of job losses.”
Although Zandi expects the appointment to resume in June, as states ease closings, he warned that in a few years’ time, it will be a struggle to restore all jobs lost in April.
The private sector report appears two days on the official monthly job statistics of the U.S. Labor Department.
According to ADP, the leisure and hospitality sector lost 8.6 million workers last month. Trade, transport and utilities let 3.4 million people go. Construction companies cut nearly 2.5 million jobs, while manufacturers let out about 1.7 million people.
Healthcare cut 1 million jobs, but educational services posted a profit of 28,000, as colleges and universities don’t seem to have forced significant layoffs that could come later this year.
3.8 million new claims for unemployment benefits were submitted last week, according to the latest Labor Department figures released last Thursday
More than 30 million Americans have now lost their jobs in the six weeks since the outbreak of the coronavirus as the US economy slipped further into a crisis that has been most devastating since the 1930s
More than half of the job losses in April came from smaller companies with 500 employees or less. But larger employers are cutting 8.9 million jobs.
A poll by The Associated Press and the NORC Center for Public Affairs Research shows that nearly eight out of ten households with job losses expect to return to their previous employer.
“One thing is certain: this pandemic health crisis has caused job losses due to depression, meaning this recovery will take longer than many think,” said Chris Rupkey, chief economist at MUFG in New York.
“The Great Depression has lasted three and a half years and it will be a miracle when the economy returns to normal in the coming years.”
March data has been revised to show that private payrolls are down 149,000 jobs instead of the previously reported 27,000, which was the first decline since September 2017.
The ADP report was developed jointly with Moody’s Analytics.
Poor employment rates in the US are expected with the publication on Friday, May 8, of figures for the April US jobs report, with 30 million Americans applying for unemployment in the past six weeks
A man writes information for the Illinois Department of Employment Security in Chicago. US companies cut an unprecedented 20.2 million jobs in April
The staggering numbers have long been anticipated, as 30.3 million people had filed for unemployment benefits since March 21, equivalent to nearly one in five workers losing their jobs in just over a month.
The ADP report was published ahead of the government’s more comprehensive April employment report, which was due to be released on Friday. While it has a poor track record in predicting the private payroll component of the government’s employment report due to methodological differences, economists said it provided some clues as to the magnitude of expected job losses in April.
The ADP noted that the April report “does not reflect the full impact of COVID-19 on the overall employment situation.”
“The ADP report and government data don’t always match, but at least the ADP report suggests that we’re thinking in the right direction when we consider the massive job losses we can expect in government data,” said Daniel Silver, economist at JPMorgan in New York.
According to a Reuters survey of economists, nonfarm payrolls are said to have fallen by historically 21,853 million in April, which would blow the record of 800,000 dives during the Great Recession.
Employment fell by 701,000 jobs in March, ending a record increase in earnings through September 2010.
The unemployment rate rises to 16 percent in April, which would break the record high of 10.8 percent after World War II in November 1982. In March, the unemployment rate skyrocketed by 0.9 percentage points, the largest monthly change since January 1975, to 4.4 percent.