Jobless Claims Data To Show Virus Hit On US Economy
Mohammad Ali (@ChaudhryMAli88) Published April 02, 2020 | 01:08 PM
The widespread damage to the US economy is becoming evident amid the standstill forced by the coronavirus pandemic, and data Thursday will reveal more of what are expected to be massive job losses
Washington, (APP - UrduPoint / Pakistan Point News - 2nd Apr, 2020 ) :The widespread damage to the US economy is becoming evident amid the standstill forced by the coronavirus pandemic, and data Thursday will reveal more of what are expected to be massive job losses.
Bustling cities have been turned into ghost towns, as COVID-19 restrictions have forced shops, restaurants and offices to close, leaving grocery stores and hospitals the lone epicenters of activity.
Some economists are predicting the worst job losses since World War II.
Payrolls firm ADP said Wednesday that US private employment fell in March, with small businesses bleeding jobs at a rate not seen since the worst of the global financial crisis in early 2009.
But it will be much worse in April, economists warn, with job losses projected to surge to a previously unimaginable range of 10 to 20 million -- a shocking figure in what was billed as a solid economy.
A real-time view of the damage will be available when the Labor Department on Thursday provides weekly figures on first-time claims for unemployment benefits for the week ended March 28, after most businesses were obliged to shut down.
Last week's report showed a record 3.3 million workers filed for jobless benefits in the week ended March 21, the most ever recorded. The consensus among economists this week is for another blockbuster of 2.8 million, although Briefing.com is predicting a record 4.2 million.
Meanwhile the official employment report for March is due out Friday, but that is unlikely to show the full extent of the job losses because of the nature of how that report is compiled.
- The damage mounts - Like the government jobs report, Wednesday's ADP National Employment Report looks at payroll data in the week including the 12th day of the month -- which in March was before the most stringent lockdowns took effect.
As a result, the March data "does not reflect the full impact of COVID-19 on the overall employment situation," ADP cautioned.
Ian Shepherdson of Pantheon Macroeconomics dismissed the ADP report as "irrelevant." "These numbers don't matter; they capture only the leading edge of the virus hit.
The pain is coming in April, when payrolls are likely to drop by perhaps 10 million-plus," he said in an analysis.
"The labor market was in good shape before the virus, but we knew that anyway, and it's irrelevant in the face of the impending discontinuity in the data." - Small businesses suffering - The ADP report showed total private employment fell by 27,000 in March, the biggest drop since September 2017.
Small businesses suffered the largest setback, as jobs plunged by 90,000, with the smallest firms employing less than 20 employees taking the biggest hit, the report said.
Shepherdson and other economists caution that the closely-watched official jobs report Friday also will dramatically underestimate the damage to the economy from coronavirus.
Gregory Daco of Oxford Economics has a dire prediction of 20 million jobs lost in April.
"The sudden economic stop triggered by the coronavirus crisis has given rise to an unprecedented wave of layoffs," he said in his analysis.
"Given the extreme nature of the shock, we anticipate the US will experience the sharpest job losses and highest rise in unemployment since World War II." The government has thrown a lifeline to small and medium businesses to try to stem the damage. Starting Friday, they will have recourse to an unprecedented support program that will provide $349 billion in loans that will not have to be repaid if they are used mostly to pay workers.
The paycheck protection program allows companies with less than 500 employees to receive loans of up to $10 million if they rehire and retain their workers and use three-fourths of the money on payrolls.
The government has cut out the red tape usually associated with such loans, and will forgive the full amount if companies pay workers and use no more than 25 percent towards rent, mortgage and utility bills.
That program is part of the $2.2 trillion rescue package President Donald Trump signed into law last week that also has bailouts for the airlines and a massive expansion of unemployment benefits.
hs/csADP
Related Topics
Recent Stories
Saka and Odegaard start for Arsenal, Guerreiro in Bayern midfield
Qatar PM says re-evaluating Israel-Hamas mediation role
Govt spokesperson terms allegations of PTI's Marwat against Saudi Arabia 'heinou ..
Minister appreciate UAE’s support for Pakistan economic challenges
Manchester City v Real Madrid Champions League starting line-ups
MIGA's support Pakistan in attracting foreign investments: Federal Minister for ..
Walker returns to captain Man City for Real Madrid clash
Action taken against price list violations in Khanewal district
DC chairs review meeting of DEG
Turkey accuses Israel's Netanyahu of using war 'to stay in power'
Pakistan ranked 5th most vulnerable country to climate change. Tirmizi
Nadal comeback ends in Barcelona Open second round
More Stories From World
-
EU weighs response to Russian 'interference' in election runup
3 hours ago -
Going 'backwards'? Whistleblowers slam Boeing safety culture
3 hours ago -
US to reimpose oil sanctions on Venezuela: officials
4 hours ago -
NBA bans Raptors forward Jontay Porter for life over gambling violations
4 hours ago -
20,000 rally in Georgia as MPs advance controversial 'foreign influence' law
4 hours ago -
Scholz urges other EU leaders to send Ukraine air defences
4 hours ago
-
No end in sight to Libya crisis after UN envoy quits
4 hours ago -
Ecuador tells workers to stay home amid energy crisis
5 hours ago -
Mayorkas impeachment trial begins in US Senate
5 hours ago -
House Republicans finally announce vote for $61 bn in Ukraine aid
5 hours ago -
Qatar PM says re-evaluating Israel-Hamas mediation role
5 hours ago -
Turkey accuses Israel's Netanyahu of using war 'to stay in power'
6 hours ago