How April's jobs report will help to size up the economy
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April's U.S. jobs report will certainly reveal unprecedented losses after 30.3 million people filed unemployment claims in just six weeks, but it will also contain a number of other data points that will provide important context about the real hit to the economy and what a recovery might look like.
Why it matters: The monthly Bureau of Labor Statistics (BLS) nonfarm payrolls report uses a combination of household surveys and employer records to more accurately assess the state of U.S. unemployment.
What to watch: Among the big questions analysts will be looking to answer are how many workers not counted as employed are still tied to an employer, how successful were the government's efforts at mitigating the economic shock, and how were those who remained employed affected?
- Bank of America Global Research analysts expect average weekly hours worked will "plunge to a new record low of 33.5, though this will have a side effect of boosting wage growth by 1.0% [month over month] or 3.9% [year over year] as impacted workers will skew towards low-to-medium wages."
- According to the latest report from the BLS, the number of workers placed on a part-time schedule as a result of reduced work or business conditions jumped 1.3 million (46%) between February and March.
Between the lines: A Gallup poll taken April 13–19 found 10% of Americans were temporarily laid off from work as a result of the coronavirus, and an additional 2% said they had permanently lost their job. A total of 26% said they had lost income and 15% reported reductions in hours.
- The impacts were more pronounced among those in lower income brackets, with 32% of respondents whose annual household income (before the pandemic) was less than $36,000 reporting a loss of income.
The intrigue: The CARES Act's Paycheck Protection Program was designed to keep workers tied to their employers. But small business owners have complained that the program is poorly designed, and because of increased unemployment eligibility and benefits from the government, it could worsen relationships.
The big picture: A separate Gallup poll of 540 adults from April 1–12 found that 25% of employed Americans think they are likely to be laid off in the next year.
- However, among those who have been laid off, 85% believe it is "likely" that they will be able to return to their job once the crisis has ended, with 60% saying that it is "very likely."
