The employment situation in America has gone from boom to bust over the past month. The coronavirus was already on its way to causing a major recession, and an oil share war between Saudi Arabia and Russia made a bad situation even worse. After the worst weekly jobless claims on record last Thursday, this week’s employment report from the U.S. Department of Labor likely will show just how bad things have become.
During the week of March 30 to April 3, the U.S. markets will get a slew of live “flash readings” that show just how bad the economy is looking. There is the ADP payrolls report, which is used as a bias tool for the nonfarm payrolls, and then Thursday’s weekly jobless claims for the week ending March 27 will be followed by the big Labor Department unemployment and nonfarm payrolls report covering March.
It seems more than obvious that the February 2020 unemployment rate of 3.5% and the jobless claims averaging under 220,000 will be ancient history. February’s nonfarm payrolls rose by 273,000 in the initial view almost a month ago and will have marked the zenith of the U.S. labor market.
24/7 Wall St. has looked at the preliminary expectations for this week’s unemployment and payrolls data. Some of the data seem drastic, but some of the absolute percentages and drops are likely to look even worse by the time these reports are actually released.
Before getting to the consensus estimates, note that the week of March 20 showed a new weekly jobless claims reading of almost 3.3 million. That was an exponential, all-time record. There were not even 1 million new jobless claims during the financial crisis in 2008 to 2009.
Bloomberg’s consensus estimates for this week’s key data are −150,000 for the ADP payrolls report (March), with 3.5 million weekly jobless claims, and with unemployment rising to 3.8%. Its nonfarm payrolls consensus is −100,000 at the current time.
The current Dow Jones predictions are 2.65 million in claims for the week ending March 27 and a consensus unemployment rate of 3.7%. Its estimate for March nonfarm payrolls is −56,000.
The consensus expectations already look bad, but the economists making those forecasts still have plenty of time to make the estimates look even worse if they decide to make changes.
As far as just how bad the data likely will be ahead, this time around there won’t be too many people fighting with Mark Zandi of Moody’s that the jobs market in America formally reached its peak in February and will get worse.