Jobs Report Likely to End Hiring Streak04/03 06:09
After a record 113 straight months of hiring, the government's monthly jobs
report Friday is expected to show that the American jobs machine came to a
sudden halt in March as a result of the coronavirus.
WASHINGTON (AP) -- After a record 113 straight months of hiring, the
government's monthly jobs report Friday is expected to show that the American
jobs machine came to a sudden halt in March as a result of the coronavirus.
Economists have forecast that the government will say employers shed about
150,000 jobs and that the unemployment rate rose from a half-century low of
3.5% to 3.9%, according to FactSet. But the jobs figure will vastly understate
the magnitude of last month's losses because the government surveyed employers
before the heaviest layoffs struck in the past two weeks. Nearly 10 million
Americans have since applied for unemployment benefits, far more than for any
corresponding period on record.
Still, some job cuts likely happened earlier in the month, when most
economists think businesses began clamping down on hiring. The job loss for
March will underscore the head-snapping speed with which the economy has
unraveled after nearly a decade in which employers added nearly 23 million
jobs. As recently as February, employers added 273,000 jobs.
Economists had welcomed February's job gain, though they wondered why hourly
paychecks weren't rising more quickly. But any concerns over sluggish wage
growth have now been put well off to the side.
"Four years of job gains have evaporated in the span of two weeks," said
Daniel Zhao, an economist at the jobs website Glassdoor.
The layoffs will continue to mount. Some economists have forecast that 20
million jobs will be lost by the end of April, swelling the unemployment rate
as high as 15% and wiping out the bulk of the past decade's gains. That
unemployment rate would be the worst since the 1930s.
Roughly 90% of the U.S. population is living under some version of a
shutdown order, which has forced the closure of bars, restaurants, movie
theaters, factories, gyms and most other businesses. Some hotels are closed;
others are largely empty. Fast-food chains are either closed or providing only
drive-through service, costing thousands of jobs.
With business activity tightly restricted, analysts expect a
stomach-churning recession. Economists at Goldman Sachs have forecast that the
economy will shrink at an annual rate of 34% in the April-June quarter --- the
worse fall on records dating to World War II. Goldman expects the economy to
rebound with 19% growth in the third quarter. But even by the end of next year,
the economy will not have fully recovered from the damage, Goldman projects.
Robert Kaplan, president of the Federal Reserve Bank of Dallas, said
Thursday on CNBC that he expects the unemployment rate to rise to the mid-teens
soon, before falling to about 8% by year's end.
A key determinant of the economy's future will be whether businesses can
survive the shutdown and rehire many of the workers they laid off. If so, that
would help the economy snap back and avoid the type of weak recovery that
followed the past three downturns.
So far, some large and small businesses are still paying for health care
benefits and keeping in touch with their newly laid-off workers. But if the
virus outbreak forces businesses to stay closed into the late summer, many may
go bankrupt or won't have the money to rehire their old employees.
That would keep unemployment elevated, depriving potentially millions of
people of a paycheck and slowing the recovery.