April’s jobs report is forecasted to show employers slashed about 21.7 million jobs, nearly erasing a decade of job gains in a single month. This is about 27 times the worst monthly decline during the 2007-2009 recession and about 11 times the previous record decline in September 1945 when the nation demobilized from WWII according to Bloomberg.

Bloomberg writes the jobs lost in April will be equivalent to all the job losses in every recession dating back to the second Eisenhower Administration of 1957-1961.

Some have opined that this might be the worst macroeconomic data release in history.

The unemployment rate was at a 50 year low about three months ago and may surge to over 16%, the highest level by far in records dating back to the 1940s.

The sheer number of jobless claims—33.5 million in the seven weeks through May 2—suggests more pain is yet to come unless the economy begins to dramatically reopen.

Perhaps the most important aspect of the data is where the losses are concentrated. For example, if the losses are centered in food services, accommodations and retail, an argument can be made that it would be more of an “isolated” shock. However, if the losses are in industries less directly hit by the virus, it will indicate damage to the broader economy.

Average weekly hours will also offer some insight into the degree of financial stress for those still employed as fewer hours worked dictates lower pay.

As noted many times, two months ago government was lacking information, working on a faulty set of assumptions that gave erroneous conclusions. Two months ago, one of the greatest fears was the crashing of the healthcare system via massive cases of the virus.

The question at hand is why government policy has not yet changed given the massive amount of data that has been collected? As widely noted, about 40% of deaths have occurred in nursing homes. Moreover, over 99% of deaths, the patient had pre-existing conditions; obesity and renal issues were present in the vast majority of deaths.

In my view there will be political hell to pay as the economy has been decimated, a decimation that could cause long lasting social issues.

Last night the foreign markets were up. London was closed for a holiday, Paris up 0.82%, and Frankfurt up 1.10%. China was up 0.83%, Japan up 2.56% and Hang Sang up 10.4%.

The Dow should open nominally higher following “constructive” dialogue between the US and China and reopening optimism. The 10-year is up 5/32 to yield 0.63%.


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