It is anybody’s guess as to when the overall U.S. economy will return to normal. Businesses may be given the nod to reopen, but employers might be apprehensive without any widespread testing. Governors could only start exempting certain industries, leading to handwringing from other sectors about favoritism. Employees may need to use every precaution necessary to ensure they do not contract the Coronavirus, which may or may not consist of a biohazard suit. In all of this uncertainty, one thing is for sure: We might be witnessing a peak in the number of job losses with the latest number of Americans filing for unemployment benefits falling from the previous week.
Initial Jobless Claims
According to the Department of Labor, initial jobless claims clocked in at 5.245 million for the week ending April 11, worse than the median estimate of 5.105 million. Continuing jobless claims topped 11.97 million for the week ending April 4. The four-week average, which removes the week-to-week volatility, came in at more than 5.508 million.
Last week, initial jobless claims reported to be 6.606 million, continuing jobless claims soared 7.455 million, and the four-week average was 4.265.50 million. In total, 22 million Americans have lost their jobs in just four weeks.
Other Jobs Data
Last month, 60% of employers decreased job openings and 25% closed all their job postings, according to a new study from job-search platform Glassdoor. It found that new positions on its website slumped 20.5% between March 9 and April 6, lowering its number of employment opportunities to a three-year low of 4.8 million. Glassdoor discovered a decrease in job openings in all 50 states and every industry.
Glassdoor economist Daniel Zhao wrote in a blog post:
"For perspective, the U.S. is on track to lose as many job openings on a percentage basis in the first four weeks of the crisis as we did in the first nine months of the Great Recession.
Rarely do you ever see such a large decline in economic data because that indicates an almost complete shutdown in hiring activity for that industry."
Recent DOL figures showed that total employment offerings dipped from seven million in January to 6.9 million in February. Last year, job openings had surged to an all-time high of 7.5 million.
Meanwhile, a new report highlighted that the clean energy sector has been one of the hardest-hit industries in the United States. It is estimated that more than 100,000 American jobs were lost, from solar panel installers to electric vehicle factory employees. This wiped out all the industry's gains from last year, and forecasts suggest an additional 500,000 jobs could be gone in the coming months.
Bad News Bears
How else can you describe March other than a blood bath for the United States economy?
A flurry of data came out in recent days, suggesting that COVID-19's economic damage was worse than what the experts had predicted. Everything from rotten retail sales numbers to contracting industrial output, there has been a lack of bright spots in the world’s largest economy in recent weeks. With the shutdown to last for the rest of the month, the data will likely be even worse in April.
Retail sales plunged 8.7%, worse than the median estimate of 8%. Every industry, except food and health care, witnessed a significant drop in receipts. The biggest victims were apparel (-50.5%), furniture (-26.8%), restaurants (-26.5%), automobiles (-25.6%), and gasoline stations (-17.2%).
Industrial output and manufacturing production tumbled by 5.4% and 6.3%, respectively. Both figures were a lot higher than market forecasts. Again, every sector reported a huge drop in business, led by a 28% plunge in the motor vehicle and parts industry. Capacity utilization slipped from 77% in February to 72.7% in March.
The New York Empire State Manufacturing Index cratered 56.7 points from the previous month to -78.2 in April. This represented the lowest level on record and way below forecasts of -35. New orders, shipments, employment, and inventories declined as New York became the epicenter of Coronavirus cases in the U.S.
The March mayhem had yet to happen when foreign investors sold $13.4 billion in U.S. assets in February, down from the $127.3 billion increase in January.
On the housing front, mortgage applications surged 7.3% in the week ending April 10, according to the Mortgage Bankers Association (MBA). Most of the applications were for refinancing since the 30-year rate dipped to 3.45%. March new home sales will be announced on April 23, and the consensus calls for a 4.4% decline.
April Showers, May Flowers
Has the job-loss trend peaked? The government aid program to small businesses has started releasing funds, allocating nearly $300 billion in just a few days. With this cash infusion, the number of jobless Americans seeking benefits may begin to come down. Plus, as states discuss how to reopen their economies with the virus peaking in certain areas, the government might approve exemptions for certain sectors in the coming weeks, which would spur job openings. Aside from the market rebound, there has not been a whole lot of ebullience in the U.S. economy. An incremental rise in companies unlocking their doors may spark sunshine on a Black April. As the man says, April showers bring May flowers.
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Read more from Andrew Moran.
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