Advertisement

Coronavirus: U.S. expected to report worst jobs numbers in over 70 years

Coronavirus outbreak: Pelosi calls for food bank assistance in U.S. amid pandemic
U.S. House Speaker Nancy Pelosi said Supplemental Nutrition Assistance Program (SNAP), which is the country's food stamp program, was included in the first Cares bill, but for the next three "they wouldn't accept SNAP," calling for assistance for food banks during a press conference about COVID-19 on May 7.

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.

Story continues below advertisement

The scale of the job loss has been breathtakingly sudden.

READ MORE: Experts are worried U.S. CDC taking backseat in White House coronavirus response

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.

[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]

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.

Trump retools COVID-19 task force to focus on economy
Trump retools COVID-19 task force to focus on economy

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

Story continues below advertisement

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.

READ MORE: Trump administration has shelved U.S. health officials’ reopening guide: sources

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.

Story continues below advertisement

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.

Coronavirus outbreak: Trump says U.S. task force will remain, after stating it’ll ‘wind down’
Coronavirus outbreak: Trump says U.S. task force will remain, after stating it’ll ‘wind down’

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.

Story continues below advertisement

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