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Traders and everyday investors are getting a flood of job data this week, none of which is positive.
The economic catastrophe caused by the coronavirus outbreak likely sent the U.S. unemployment rate in April to its highest level since the Great Depression and caused a record-shattering loss of jobs.
With the economy paralyzed by business closures, the unemployment rate likely jumped to at least 16 percent — from just 4.4 percent in March — and employers cut a stunning 21 million or more jobs in April, economists have forecast, according to data provider FactSet. If so, it would mean that nearly all the job growth in the 11 years since the Great Recession had vanished in a single month.
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Yet even those breathtaking figures won’t fully capture the magnitude of the damage the coronavirus has inflicted on the job market.
Many people still employed have had their hours reduced. Others have suffered pay cuts. Some who’ve lost jobs won't have been able to look for work amid widespread shutdowns and won’t even be counted as unemployed. A broader measure — the proportion of adults with jobs — could plunge to a record low.
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The government will issue the April jobs report on Friday morning. On Thursday, it will release the latest weekly report on applications for unemployment benefits. It will likely show that about 3 million people sought jobless aid last week. That would bring the total number of layoffs to nearly 34 million since the shutdowns began seven weeks ago.
That figure is much larger than the expected April job loss because the two are measured differently: The government calculates job losses by surveying businesses and households. It's a net figure that also counts the hiring that some companies, like Amazon and many grocery stores, have done despite the widespread layoffs. By contrast, the total jobless claims is a cumulative figure that includes aid applications that began in March.
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Companies are still cutting jobs in the midst of a severe downturn, with the economy possibly shrinking at an unheard-of 40 percent annual rate in the April-June quarter. GE Aviation said it is cutting up to 13,000 jobs. Uber will shed 3,700 positions.
Even as the unemployment rate reaches dizzying heights, it will likely be held down by several factors. The Labor Department counts people as unemployed only if they're actively searching for work. Yet many laid-off workers may be discouraged from looking for a new job given that so many non-essential businesses are closed. Others may stay home to protect their health. Still others may feel they have to stay with children who are home from school.
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In addition, some workers on temporary layoff might be incorrectly classified as what the government calls “employed, but absent from work.” This can happen if employees assume they will return to their jobs once their employer reopens.
The Associated Press contributed to this article.
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