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Coronavirus pandemic ravages US payrolls, April job losses top 20 million

The Labor Department's closely watched monthly employment report on Friday also showed the unemployment rate surging to 14.7% last month, shattering the post-World War Two record of 10.8%

Topics
Coronavirus | US economy | US unemployment

Reuters 

unemployment, US job growth, job growth, US jobs
Its the steepest plunge in payrolls since the Great Depression

The lost a staggering 20.5 million jobs in April, the steepest plunge in payrolls since the Great Depression and the starkest sign yet of how the novel pandemic is battering the world’s biggest

The Labor Department’s closely watched monthly employment report on Friday also showed the unemployment rate surging to 14.7% last month, shattering the post-World War Two record of 10.8% touched in November 1982.

KEY POINTS:

US April nonfarm payrolls -20.5 million, better than consensus forecast of -22 million

US private sector jobs -19.520 million, vs -21.05 million expected

April factory jobs -1.33 million, vs consensus -2.5 million

US April goods-producing jobs -2.355 million, construction -975,000, private service-providing jobs -17.165 million, retail -2.107 million

US government jobs -980,000

US labor force participation rate 60.2% vs 62.7% in March

US April jobless rate 14.7% (consensus 16.0%) vs March 4.4%


MARKET REACTION:

STOCKS: S&P 500 stock index futures slightly extend gains, last up 1.1%, pointing to a higher openBONDS: Yields on the US 10-year Treasury rose to 0.6640% and two-year yields rose to 0.1309%FOREX: The US Dollar Index turned a tad higher, last up 0.004%

COMMENTS:

JJ KINAHAN, CHIEF MARKET STRATEGIST, TD AMERITRADE, CHICAGO

“It was better than expectations but that means nothing. Until actually the June report, not the one coming out in June, but the June report. These don’t mean as much because the expectations is in June you have a lot more states back to work. You get some now, you get some then, obviously the hospitality industry is just absolutely devastated, which should be expected.

“The test going forward will be healthcare because hopefully dentists and doctors offices reopen. The government lost jobs and that is all school-related so you would think those would come back. The ones that concern me are manufacturing and construction – do those jobs come back? The business to business services was probably a little bit lighter than I thought that might have been only because so many people have the ability to work from home that I thought that one still might survive but there is something in terms of sales that is still face to face. I am giving that more to the fact companies aren’t locked down in terms of spending.

“My big worry for the market is we have a potential weak spot coming for the market in late May or mid-June because there is going to be this anxiousness that everything should pick up right away and this is going to take a while for us to get going again. So that is the next real test for the market. Right now we are trading a lot on optimism, let’s be honest. Optimism meeting reality is what is going to happen there.”

BESPOKE INVESTMENT GROUP, HARRISON, NY (CLIENT NOTE)

“We’ve just seen what is probably the worst jobs report in the life of anyone reading this. That’s the bad news. The good news? Hopefully, we’ll never see a report like this again! Today’s April Non-Farn Payrolls report is definitely great fodder for headlines heading into the weekend, but it is what it is. Everyone is expecting it, so it shouldn’t surprise anyone. Economists and market watchers will take great pains to dissect the numbers, but keep in mind that there are lots of distortions, and once all the revisions are made in the months ahead, the numbers will likely change a lot.”

First Published: Fri, May 08 2020. 20:00 IST
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