May 8, 2020 / 1:10 PM / 3 months ago

Instant view: Coronavirus ravaged U.S. payrolls in April, 20.5 mln jobs lost

(Reuters) - The U.S. economy lost a staggering 20.5 million jobs in April, the steepest plunge in payrolls since the Great Depression and the starkest sign yet of how the novel coronavirus pandemic is battering the world’s biggest economy.

FILE PHOTO: People who lost their jobs wait in line to file for unemployment following an outbreak of the coronavirus disease (COVID-19), at an Arkansas Workforce Center in Fayetteville, Arkansas, U.S. April 6, 2020. REUTERS/Nick Oxford

The Labor Department’s closely watched monthly employment report on Friday also showed the unemployment rate surging to 14.7% last month, shattering the post-World War Two record of 10.8% touched in November 1982.


** U.S. April nonfarm payrolls -20.5 million, better than consensus forecast of -22 million

** U.S. private sector jobs -19.520 million, vs -21.05 million expected

** April factory jobs -1.33 million, vs consensus -2.5 million

** U.S. April goods-producing jobs -2.355 million, construction -975,000, private service-providing jobs -17.165 million, retail -2.107 million

** U.S. government jobs -980,000

** U.S. labor force participation rate 60.2% vs 62.7% in March

** U.S. April jobless rate 14.7% (consensus 16.0%) vs March 4.4%


STOCKS: S&P 500 stock index futures slightly extend gains, last up 1.1%, pointing to a higher openBONDS: Yields on the U.S. 10-year Treasury rose to 0.6640% and two-year yields rose to 0.1309%FOREX: The US Dollar Index turned a tad higher, last up 0.004%



“Regardless of the fact it is lesser than what was expected, the numbers are dismal. There is another aspect to this – it is how condensed it is. These number happened quickly, it was a result of government shutdowns, not because of a prolonged 12 years of depression. To counter that, it is important to see the attempt to open the economy and that is what the market is focused on, as opposed to the dismal implications of these numbers.”


“Futures were up in advance on better U.S.-China trade discussions. The job loss numbers at 20.5 million came in largely as expected as heartbreaking as that is because every piece of that has a human element to it. What is striking is the speed at which we have lost jobs.”

   “When you compare this to the great depression in the 30s it took a full year for the unemployment rate to go up 8%. We moved the unemployment rate up 10% in a month. When you shut the economy down, it’s not surprising but the materiality of it is unbelievable.”

“The unemployment rate came in a little bit less than expected. Expectations were for 16-16.5% unemployment and it came in at 14.7%.”

“I think there’s some noise in that number mainly because we expected some people to classify themselves as employed but not at work ... Furloughed employees may have classified themselves as that. The unemployment rate probably understates the amount of unemployment.”

“There were whisper numbers that the number could come in much worse. Some of the whisper numbers I was seeing was that you could have a headline job report loss of 23-24 million instead of 20 million and a higher unemployment rate. The fact they didn’t come in higher is a bit of a relief rally. The market is exhaling a little bit on the fact that the worst jobs report in modern history wasn’t even worse.”

“These numbers will only go higher in the month of May the job losses and the unemployment rate. We’re not done.”


“Because of the COVID-19 pandemic and the economic shutdown to combat its spread, the employment situation has completely flipped from just two months ago when much of the United States seemed to be at, or near, full employment.”

“Several states are relaxing their stay-at-home orders now and governments and businesses have stepped up to support many workers and companies, but it remains to be seen what the new normal will look like. Some industries and companies may be changed forever, but the economy as a whole was on solid footing at the start of the year and should be well-poised for a recovery once the COVID-19 pandemic abates.”


“Going in we knew we were going to see staggering job losses. But what we are looking at are temporary job losses, which gives us hope that those jobs could come back. But overall it’s a bleak report.”

“Given the historic numbers we’re looking at, we still see a U-shaped recovery for now. But we’re in a holding pattern, waiting to see how this shapes up.”

“It’s a bleak report but you have to look into the layers. The temporary job losses and the 4.7% increase in average hourly earnings give you a sense that the job losses are in the sectors that we knew were under a lot of pressure.”


“It was better than expectations but that means nothing. Until actually the June report, not the one coming out in June, but the June report. These don’t mean as much because the expectations is in June you have a lot more states back to work. You get some now, you get some then, obviously the hospitality industry is just absolutely devastated, which should be expected.

“The test going forward will be healthcare because hopefully dentists and doctors offices reopen. The government lost jobs and that is all school-related so you would think those would come back. The ones that concern me are manufacturing and construction – do those jobs come back? The business to business services was probably a little bit lighter than I thought that might have been only because so many people have the ability to work from home that I thought that one still might survive but there is something in terms of sales that is still face to face. I am giving that more to the fact companies aren’t locked down in terms of spending.

“My big worry for the market is we have a potential weak spot coming for the market in late May or mid-June because there is going to be this anxiousness that everything  should pick up right away and this is going to take a while for us to get going again. So that is the next real test for the market. Right now we are trading a lot on optimism, let’s be honest. Optimism meeting reality is what is going to happen there.”


“We’ve just seen what is probably the worst jobs report in the life of anyone reading this.  That’s the bad news.  The good news?  Hopefully, we’ll never see a report like this again!  Today’s April nonfarm Payrolls report is definitely great fodder for headlines heading into the weekend, but it is what it is.  Everyone is expecting it, so it shouldn’t surprise anyone.  Economists and market watchers will take great pains to dissect the numbers, but keep in mind that there are lots of distortions, and once all the revisions are made in the months ahead, the numbers will likely change a lot.”

Compiled by Alden Bentley

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