A devastating jobs report for April will show virus’s impact
A woman sitting on a stoop reading a book in the sun is seen reflected by a closed clothing store's window on West Broadway, Thursday, May 7, 2020, in the SoHo neighborhood of the Manhattan borough in New York. The U.S. government is poised to report the worst set of job numbers since record-keeping began in 1948, a stunning snapshot of the toll the coronavirus has taken on a now-shattered economy. (AP Photo/Mary Altaffer)

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Worst numbers since 1940s expected.

The U.S. government on Friday is poised to report the worst set of jobs numbers since record-keeping began in 1948, a snapshot of the devastating damage the coronavirus outbreak has inflicted on the economy.

The unemployment rate for April could reach 16% or more, according to economists surveyed by the data provider FactSet. Twenty-one million jobs may have been lost. If so, it would mean that nearly all the job growth in the 11 years since the Great Recession ended had vanished in one month.

Even those numbers won’t fully capture the scope of the damage the coronavirus has inflicted on jobs and incomes. Many people who are still employed have had their hours reduced. Others have suffered pay cuts. Some who lost jobs in April and didn’t look for a new one in light of their bleak prospects won’t even be counted as unemployed. A broader measure — the proportion of adults with jobs — could hit a record low.

The scale of the job loss has been breathtakingly sudden.

During the Great Recession of 2008-2009, the nation lost 6.5% of its jobs over a two-year span. It was the worst loss in any recession since World War II. Yet in just April alone, the expected job loss of 21 million would amount to 14% of all jobs — more than twice as much.

The impact on individuals has been vast. One of the newly unemployed, Sara Barnard, 24, of St. Louis, has lost three jobs: A floor manager at a pub and restaurant, a bartender at a small downtown tavern and the occasional stand-up comedian. Her main job was at McGurk’s, an Irish pub and restaurant near downtown that closed days before St. Patrick’s Day. She had worked there continually since high school.

McGurk’s tried selling food curbside, Barnard said, but it was costing more to keep the place open than the money that was coming in. Around that time, the bar where she worked closed, and comedy jobs ended when social distancing requirements forced clubs to close.

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

Job losses and pay cuts are ranging across the world. Unemployment in the 19-country eurozone is expected to surpass 10% in coming months as more people are laid off. That figure is expected to remain lower than the U.S. unemployment rate. But it doesn’t count many people who either are furloughed or whose hours are cut but who receive most of their wages from government assistance.

In France, about half the private-sector workforce is on a government paid-leave program whereby they receive up to 84% of their net salary. In Germany, 3 million workers are supported in a similar system, with the government paying up to 60% of their net pay.

In the five weeks covered by the U.S. jobs report for April, 26.5 million people applied for unemployment benefits. The job loss to be reported Friday may be less because the two are measured differently: The government calculates job losses by surveying businesses and households. It’s a net figure that also counts the hiring that some companies, like Amazon and many grocery stores, have done. By contrast, the total jobless claims is a measure of just the layoff side of the equation.

For the United States, a key question is where the job market goes from here. Applications for unemployment aid, while high, have declined for five straight weeks, a sign that the worst of the layoffs has passed. Still, 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. A paper by economists at the San Francisco Federal Reserve estimates that under an optimistic scenario that assumes shutdowns are lifted quickly, the unemployment rate could fall back to about 4% by mid-2021.

But if shutdowns recur and hiring revives more slowly, the jobless rate could remain in double-digits until the end of 2021, the San Francisco Fed economists predict.

Raj Chetty, a Harvard economist, is tracking real-time data on the economy, including consumer spending, small business hiring and job postings. Chetty noted the economy’s health will hinge on when the viral outbreak has subsided enough that most Americans will feel comfortable returning to restaurants, bars, movie theaters and shops.

The data suggests that many small businesses are holding on in hopes that spending and the economy will rebound soon, he said. Small business payrolls have fallen sharply but have leveled off in recent weeks. And job postings haven’t dropped nearly as much as total jobs have. But it’s unclear how much longer those trends will persist.

“There’s only so long you can hold out,” Chetty said.

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Republished with permission of the Associated Press.

Associated Press


2 comments

  • Andrew Nappi

    May 8, 2020 at 6:34 am

    “Virus impact?” I think you misspelled arbitrary destruction of lives, businesses and jobs incorrectly. What DeSantis and every safer at home, lockdown mandating abuse of power Florida office holder needs is jail time. This has been one of the greatest hoaxes and financial heists of all time. Justice demands prison for all of these SOBs and the forfeiture of all their possessions to those whose lives they have destroyed.

    • Mark S Blood

      May 8, 2020 at 10:56 am

      Just one example in support of Andrew’s comments – look at the Phase 1 we are in. Agree, we need to be thougtful, go slow, be careful. But part of this says, it’s OK to open up hotels, motels and B&Bs, but not FL vacation rentals? WTF? Why would it be OK to open public common areas at hotels, common areas and desktops and railings and buttons that EVERYone touches, but not allow a homeowner to rent a vacation rental? I assure you we can clean and sanitize our homes better than a property overrun by the public. AND I HEARD THAT EVEN WHEN PHASE 2 IS IN PLACE, ONLY GUESTS FROM FLORIDA ARE ALLOWED??? W.T.F.???? This SURE seems like pandering to the hotel lobbies, to the big corporations vs. those of us who are trying to provide a local service. And why is it that corps and small biz get reimbursed but not vacation rentals? We don’t have employees so there is no CARE act. This is BS and will remembered at the next time of election, I assure you!!

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