Economists polled by Refinitiv expect the US economy shed 21.85 million jobs in April, by far the largest number on record. The US government’s monthly jobs data dates back to 1939.
Meanwhile, economists polled by Refinitiv expect the unemployment rate soared to 16%, the highest rate since the BLS started tracking monthly unemployment numbers in 1948. That’s a level of joblessness not seen since the Great Depression in the 1930s, for which the BLS estimates annual data.
Government economists estimate the unemployment rate peaked at 24.9% in 1933.
“We’re looking at probably the worst unemployment rate since the Great Depression,” Hassett told CNN’s Poppy Harlow.
We won’t have a complete picture of just how bad the pandemic is for the job market until next month, said Marvin Loh, senior global macro strategist at State Street. Job growth will probably resume by Memorial Day as businesses in many parts of the United States start to reopen, noted Moody’s Analytics Chief Economist Mark Zandi in a research report this week.
Some states are already beginning to loosen restrictions, while others will take longer to open and rehire.
Economists also worry whether consumers will spend like they used to once the great reopening is under way. Consumer spending typically accounts for about two-thirds of US gross domestic product, the broadest measure of the American economy. A more cautious consumer who spends more time at home could leave the restaurant and entertainment sectors — and their labor forces — to recover more slowly, said David Kelly, chief global strategist at JPMorgan Funds.
Foreshadowing from jobless claims
The Covid-19 outbreak has torn through America over the past two months. People began working from home where possible in the second half of March, as businesses closed and schools suspended in-person teaching. As the lockdown dragged on, companies laid off and furloughed their staff.
Another 3 million initial claims are expected for the week ended May 2. The report is due at 8:30 am ET on Thursday.
People are only counted as “unemployed” by the BLS when they have been out of work but available for a new job, as well as actively searching for one, in the prior four weeks. Or, if they were on “temporary layoff” with the expectation of being recalled to work within six months.
But in the current crisis, millions of jobless Americans won’t be looking for a new job, given business closures and stay-at-home orders.
This means plenty of laid-off people won’t be counted in the April unemployment rate.