The US didn’t start taking stringent measures against the pandemic till around mid-March. The rest of the world, on the other hand, had been sounding the alarms for weeks.
The true impact of the virus on job numbers will appear in April’s report. But, nevertheless, the March numbers will start pointing to the tough times ahead.
The upcoming NFP report could indicate that since 2010, this will be the first time the US economy has lost jobs.
These numbers are expected to deteriorate stupendously in the coming months.
March Finally Ends
Most will be glad to see the month of March finally ending. It certainly has been brutal to every aspect of life.
Financial markets crumbled like a house of cards and even at present, they are gasping for breath.
Beginning the new month with the nonfarm payroll, investors and traders alike will be closely watching the release. This report will show just how much things have changed on the employment front in the largest economy of the world.
The expectation is for a 100k job loss. This is after a strong print of + 273k last time around. However, considering last week’s initial jobless claims of 3.2 million, a 100k read would be welcomed with open arms.
Employment Data Points to Recession
The US jobless claims released just a minute ago are a clear-cut indication of what to expect going forward.
Jobless claims have risen to 6.648 million. The expectation was for 3.6 million, but this beat the expectation by a long mile, doubling from last week’s claims.
The grim situation is very apparent and this news event may just overshadow the NFP release tomorrow.
Compared to the NFP release for which data was sampled in mid-March, the jobless claims are recent.
The US didn’t realize the need for a lockdown until mid-march, as it was been downplayed by President Trump.
Therefore, the NFP won’t reflect the true deterioration of the economy and job situation, as the severe damage only started after the lockdown.
Tom Porcelli of RBC Capital Markets stated:
“The US may see upwards of 20 million jobs lost in the coming months”
Things are about to get much worse and more layoffs could set in a recession. We may not like uttering that dreaded word. But, unfortunately, that’s what the things are pointing towards.