Analysts: big jump in U.S. jobless rate to occur in April report, not March
(Kitco News) - The expected massive rise in the U.S. jobless rate will show up in the report for April due out in early May, not the March report due out on Friday morning, analysts said.
U.S. initial jobless claims rose by a combined 10 million the last two weeks as a result of layoffs when when many businesses went into lockdown to combat the COVID-19 pandemic.
“This will not yet be reflected in today’s labor market data for March, however, as these do not cover the last two weeks,” said Commerzbank metals analyst Carsten Fritsch. “This means the April report is likely to be even worse.”
Bannockburn Global Forex explained that the surveys used in the monthly U.S. job report are normally conducted in the week of the 12th of the month, meaning the data is “dated” since it comes before the sharp jump in jobless claims the last two weeks.
Jobless claims are likely to be high again next week due to shutdowns of Florida and the rest of Pennsylvania, said Brown Brothers Harriman. Meanwhile, the 10 million people filing claims the last two weeks represent roughly 6.5% of the 150 million who were employed in February, BBH said.
“This means the unemployment rate is already around 10%, though that won't show up in today's jobs report since the survey was taken earlier in the month before the bottom fell out of the labor market,” BBH said. “We look for unemployment rate between 10-15% in April. We'll know more as more claims data come out.”
As of the February report, the jobless rate was 3.5%. Consensus estimates called for this to tick up only to only 3.7% or 3.8% in the March report, with nonfarm payrolls seen falling by only 82,000 to 100,000.