Everyone is waiting for the damage the coronavirus inflicts on the United States jobs market to become more evident. It might be unlike anything the country has ever seen.
The avalanche of furloughs will easily break the record for most in a single month, judging with forecasts from economists.
Even during the worst points of the financial crisis and the early-1980s recession, upcoming weekly jobless claims will shatter the worst aspects. The number will be released next Thursday. Moreover, Bank of America’s forecast is a total of 3 million job losses. Many expect to be those numbers terrible. Thus, the administration of Trump has asked state officials to delay releasing precise counts. It is according to several media reports.
During the Great Depression, it was highly unlike to the unemployment rate to approach the 24.9 percent. Now it can be the highest in almost 40 years. It is something unthinkable for a market of the jobs that had been of fire as recently as February.
Thus, job losses will instead be counted in the millions, then in the thousands or even hundreds of thousands. It is uncertain whether the total count from this recession will end up breaking records from previous periods. Nevertheless, it looks like a good bet that if nothing else, the number for April will undoubtedly outpace the large margin any singe month in United States history for a drop in nonfarm payrolls.
In March 2009, during the financial crisis, the worst month for job losses was 800,00.
The problem of the United States
Many forecasts see the April month as a quintupling that or worse. Thus, the outlook is that the month range from 500,000 to 5 million.
Jeremy Lawson is the chief economist at Aberdeen Standard Investments. He says that many things are unknown. By that, he refers to the prolonged disruption to economic activity—the economic activity which is related to the containment of the virus. Thus, forecasting is challenging. By April, that might be the deepest level of contraction.
The March nonfarm payrolls report will most probably not reflect the worst of the layoffs. It is because of the way the Labor Department conducted its sampling.
Lawson announced tat a drop of 500,000 for the month is not an unreasonable starting point. It is concerning the April. Nevertheless, other forecasters see a far gloomier picture.
Ian Shepherdson is a chief economist of Pantheon Macroeconomics. Unfortunately, he sees the possibility of five million job losses in that month alone.
Shepherdson said in a note that they never imagined that they would write anything like that. He forecasts that the shock will be huge. Thus, the policymakers won’t have any other choice but to pass much more stimulus than is now under discussion.
Steven Blitz is the chief United States economist at TS Lombard. He forecasts that the unemployment rate will be 10.6%. Also, he says that 17.9 million Americans will be on the unemployment line. Or about twelve million more than in February. The rate of current job loss is 3.5%, which is the lowest in more than 50 years.
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