Very sobering outlook.
Another 4.427 million people filed a new unemployment claim last week bringing the total jobs lost to 26.5 million since mid March.
With the pain spreading from retail and hospitality to other sectors. less than half of the working-age population of America will be earning a wage by May
How bad can it get?
The April jobs report is published on Friday 8 May, but we have to remember the data is collected in the week of the 12th so today’s numbers will actually be more applicable to the May jobs report, published in early June.
If we assume unemployment has risen 20 million in April, that would push the unemployment rate to around 16%.
An additional 10 million unemployed in May and we are looking at an unemployment rate of around 22%.
Thankfully this is below the 24.9% peak experienced in 1933, but we have to remember that one-third of Americans aged 18-65 are not classified as employed or unemployed – they are students, early retirement, homemakers, carers or sick.
This leads us to yet another sobering statistic – that less than half of working-age Americans will be earning a wage next month. In an election year, this means that the call for politicians to re-open the economy is only going to get louder, irrespective of the health advice.
Source: Macrobond, ING