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U.S. Jobs Report Shows Clearest Data Yet on Economic Toll: Live Updates U.S. Jobs Report Shows Clearest Data Yet on Economic Toll: Live Updates
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The Labor Department said Friday that the economy shed more than 20.5 million jobs in April, sending the unemployment rate to 14.7 percent — devastation unseen since the Great Depression.The Labor Department said Friday that the economy shed more than 20.5 million jobs in April, sending the unemployment rate to 14.7 percent — devastation unseen since the Great Depression.
The report underscores the speed and depth of the labor market’s collapse as the coronavirus pandemic took a devastating toll. In February, the unemployment rate was 3.5 percent, a half-century low. And even since the survey was taken, millions of people have filed claims for jobless benefits. The report underscores the speed and depth of the labor market’s collapse as the coronavirus pandemic took a devastating toll. In February, the unemployment rate was 3.5 percent, a half-century low.
The April job losses alone far exceed the 8.7 million in the last recession, when unemployment peaked at 10 percent in October 2009. The only comparable period came when the rate reached about 25 percent in 1933, before the government began publishing official statistics.The April job losses alone far exceed the 8.7 million in the last recession, when unemployment peaked at 10 percent in October 2009. The only comparable period came when the rate reached about 25 percent in 1933, before the government began publishing official statistics.
If anything, the report understates the damage. The government’s definition of unemployment typically requires people to be actively looking for work. And the unemployment rate doesn’t reflect the millions still working who have had their hours slashed or their pay cut. If anything, the report understates the damage. The government’s definition of unemployment typically requires people to be actively looking for work. And the unemployment rate does not reflect the millions still working who have had their hours slashed or their pay cut.
Many of the unemployed said they had been temporarily laid off and expected to return to their jobs. But the joblessness that began with layoffs in the leisure and hospitality industry has extended throughout the economy, from manufacturing and retail industries to white-collar redoubts like business services, meaning it will take longer for the labor market to recover. The unemployment rate for black workers jumped to 16.7 percent, nearly three times its level in February — before coronavirus shutdowns took hold — and the highest since early 2010.
But in an interview on Fox News on Friday, President Trump predicted the economy would come roaring back after the “artificial” closing. For Hispanic or Latino workers, the unemployment rate jumped to 18.9 percent, up from 6 percent in March and the highest on records going back to the 1970s. That compares with an overall unemployment rate of 14.7 percent for the nation, and a 14.2 percent jobless rate for white workers.
“Those jobs will all be back and they’ll be back very soon,” Mr. Trump said, “and next year we’re going to have a phenomenal year.” The number is striking because employment gains among minorities, and black workers in particular, had been a bright spot in the record-long expansion that preceded the coronavirus lockdown and a major talking point for President Trump.
Women lost 11.9 million jobs in April, more than the 10.4 million shed by their male counterparts, as coronavirus shuttered service industries where they tend to be heavily employed.
Unemployment for women surged to 16.2 percent from 3.4 percent as recently as February, and men saw their jobless rate jump to 13.5 percent from 3.6 percent that month.
The gap is a sharp reversal from what happened in the 2007 recession, when men shed jobs rapidly as industries like construction fell off a cliff. But the pandemic is heavily hitting service sector employment.
As tens of millions of Americans lost their jobs in April, 78.3 percent of them classified their separation as a temporary layoff, while 11.1 percent said their situation was permanent.
That is an unusually high share of people on temporary layoffs, and it could be good news for the economy because short-term job losses suggest that hiring may come back quickly when businesses reopen.
But there’s an important caveat: Temporary layoffs can always become permanent later, if the economic situation worsens.
Nearly nine million workers in April reported that they were employed but absent from work for “other” reasons — meaning not because they were sick, on vacation or other typical reasons for absence. That’s about 7.5 million more people than in a typical April.
The Labor Department on Friday said that many of these people probably should have been recorded as “unemployed” instead. And if they had been, “the overall unemployment rate would have been almost 5 percentage points higher than reported” — or close to 20 percent.
The issue highlights how standard economic measures are struggling to reflect the unusual nature of this crisis.
Bank earnings have taken a hit and key capital ratios — meant to help them weather economic downturns safely — are declining, the Federal Reserve said in its semiannual supervision and regulation report.Bank earnings have taken a hit and key capital ratios — meant to help them weather economic downturns safely — are declining, the Federal Reserve said in its semiannual supervision and regulation report.
The Fed explained its recent bank oversight tweaks in the report to Congress, which will be followed up next week by testimony from Randal K. Quarles, the Fed’s supervisory vice chair. Those alterations have included encouraging banks to dip into their capital and liquidity cushions and temporarily excluding government bonds and central bank deposits from a leverage ratio. Together, they are an effort to keep banks lending as coronavirus lockdowns threaten the broader economy.The Fed explained its recent bank oversight tweaks in the report to Congress, which will be followed up next week by testimony from Randal K. Quarles, the Fed’s supervisory vice chair. Those alterations have included encouraging banks to dip into their capital and liquidity cushions and temporarily excluding government bonds and central bank deposits from a leverage ratio. Together, they are an effort to keep banks lending as coronavirus lockdowns threaten the broader economy.
Large bank earnings declined more than 50 percent at the start of the year compared to the first quarter of 2019, the Fed report said, as banks penciled in major loan losses. Capital levels at the banks also declined, with one key measure falling to 11 percent at the end of the first quarter from 11.5 percent at the end of 2019 at the 22 large domestic bank holding companies. Large bank earnings declined more than 50 percent at the start of the year compared with the first quarter of 2019, the Fed report said, as banks penciled in major loan losses. Capital levels at the banks also declined, with one key measure falling to 11 percent at the end of the first quarter from 11.5 percent at the end of 2019 at the 22 large domestic bank holding companies.
Bank capital is a key sign of health. Capital includes assets, such as common stock and retained earnings, that are not under contract to be repaid and can help to absorb losses.Bank capital is a key sign of health. Capital includes assets, such as common stock and retained earnings, that are not under contract to be repaid and can help to absorb losses.
Nearly two weeks after the Paycheck Protection Program began making its second round of loans, nearly 40 percent of the funds remain unclaimed — surprising lenders who thought the money would vanish fast.Nearly two weeks after the Paycheck Protection Program began making its second round of loans, nearly 40 percent of the funds remain unclaimed — surprising lenders who thought the money would vanish fast.
Just over $185 billion of the program’s $310 billion had been allocated as of Thursday evening, the Small Business Administration said in its latest report. Intended to help small companies keep their workers employed, the program offers a forgivable loan to cover eight weeks of payroll and certain other operating expenses, like rent.Just over $185 billion of the program’s $310 billion had been allocated as of Thursday evening, the Small Business Administration said in its latest report. Intended to help small companies keep their workers employed, the program offers a forgivable loan to cover eight weeks of payroll and certain other operating expenses, like rent.
But growing concern among business owners over the program’s complex and still-changing rules has dampened demand. Some who took the cash are sitting on it. Those who don’t spend the money on payroll won’t have the loan forgiven, saddling them with a large debt during an economic collapse. For many owners, though, hiring back workers in the face of so much uncertainty doesn’t make sense. But growing concern among business owners over the program’s complex and still-changing rules has damped demand. Some who took the cash are sitting on it. Those who do not spend the money on payroll will not have the loan forgiven, saddling them with a large debt during an economic collapse. For many owners, though, hiring back workers in the face of so much uncertainty does not make sense.
Carrie Morey owns Callie’s Hot Little Biscuit, a small group of restaurants in Atlanta and Charleston. She got a loan in the paycheck program’s second round, but is hoping for rule changes before she starts using it. She would like to have a much longer period — ideally until the end of the year — to bring back workers and still have her loan forgiven.Carrie Morey owns Callie’s Hot Little Biscuit, a small group of restaurants in Atlanta and Charleston. She got a loan in the paycheck program’s second round, but is hoping for rule changes before she starts using it. She would like to have a much longer period — ideally until the end of the year — to bring back workers and still have her loan forgiven.
“Even if tomorrow everything were fine and we were to go back to business as usual, it’s going to take months for us to get customers to come in the door,” Ms. Morey said Thursday at a virtual gathering of business owners.“Even if tomorrow everything were fine and we were to go back to business as usual, it’s going to take months for us to get customers to come in the door,” Ms. Morey said Thursday at a virtual gathering of business owners.
Tesla intends to restart its factory in California on Friday, after Gov. Gavin Newsom said manufacturing companies could resume operations even as other businesses are to stay closed because of the coronavirus pandemic.Tesla intends to restart its factory in California on Friday, after Gov. Gavin Newsom said manufacturing companies could resume operations even as other businesses are to stay closed because of the coronavirus pandemic.
The company informed employees of the plan in companywide emails sent late Thursday and early Friday that were reviewed by The New York Times.The company informed employees of the plan in companywide emails sent late Thursday and early Friday that were reviewed by The New York Times.
“I will be on the line personally helping wherever I can,” Tesla’s chief executive, Elon Musk, wrote in one message. “However, if you feel uncomfortable coming back to work at this time, please do not feel obligated to do so.”“I will be on the line personally helping wherever I can,” Tesla’s chief executive, Elon Musk, wrote in one message. “However, if you feel uncomfortable coming back to work at this time, please do not feel obligated to do so.”
Mr. Musk has criticized stay-at-home orders that forced the electric carmaker to cease production at the plant in Fremont last month. At first, Mr. Musk tried to keep the plant open but was forced to shut it down by local officials. In a conference call last week, Mr. Musk called the order “fascist.” Mr. Musk has criticized stay-at-home orders that forced the electric-car maker to cease production at the plant in Fremont, Calif., last month. At first, Mr. Musk tried to keep the plant open but was forced to shut it down by local officials. In a conference call last week, Mr. Musk called the order “fascist.”
Tesla is heavily dependent on the Fremont plant, which currently produces almost all of the vehicles it sells. Tesla is heavily dependent on the Fremont plant, which produces almost all of the vehicles it sells.
The Hunt & Fish Club, a Manhattan steakhouse in which former White House communications director Anthony Scaramucci is a partner, received a Paycheck Protection Program loan during its second round of funding, according to two people familiar with the situation. The Hunt & Fish Club, a Manhattan steakhouse in which Anthony Scaramucci, the former White House communications director, is a partner, received a Paycheck Protection Program loan during its second round of funding, according to two people familiar with the situation.
Mr. Scaramucci was not involved in the application process, the people said. Mr. Scaramucci, who served a 10-day stint as President Trump’s communications director, said he had not heard about the loan until informed by The New York Times. “Wow that’s great news,” he texted.Mr. Scaramucci was not involved in the application process, the people said. Mr. Scaramucci, who served a 10-day stint as President Trump’s communications director, said he had not heard about the loan until informed by The New York Times. “Wow that’s great news,” he texted.
Nelson Braff, the restaurant’s operating partner, would not indicate the amount of the loan, but said it allowed his team to bring their employees back onto the payroll.Nelson Braff, the restaurant’s operating partner, would not indicate the amount of the loan, but said it allowed his team to bring their employees back onto the payroll.
“It’s helpful for the staff, but it’s pretty useless otherwise,” he said, citing the program’s requirement that loans be spent within eight weeks of receipt.“It’s helpful for the staff, but it’s pretty useless otherwise,” he said, citing the program’s requirement that loans be spent within eight weeks of receipt.
Mr. Braff, who said his mother and cousin had died from complications of coronavirus, added that he was concerned about reopening before it could be done in a way that was sustainable for the business and safe for its customers and staff.Mr. Braff, who said his mother and cousin had died from complications of coronavirus, added that he was concerned about reopening before it could be done in a way that was sustainable for the business and safe for its customers and staff.
The unemployment rate for black workers jumped to 16.7 percent, nearly 3 times its level in February — before coronavirus shutdowns took hold — and the highest since early 2010.
For Hispanic or Latino workers, the unemployment rate jumped to 18.9 percent, up from 6 percent in March and the highest on records going back to the 1970s. That compares with an overall unemployment rate of 14.7 percent for the nation, and a 14.2 percent jobless rate for white workers.
The number is striking because employment gains among minorities, and black workers in particular, had been a major bright spot in the record-long expansion that preceded America’s coronavirus lockdown. The group’s record-low jobless rate had become a major talking point for President Trump and key Federal Reserve officials.
“We were hearing from a minority low and moderate income and minority communities that this was the best labor market they’d seen in their lifetime,” Jerome H. Powell, the Fed chair, said at his April 29 news conference. “It is heartbreaking, frankly, to see that all threatened now.”
And Friday’s jobs report — which showed that 20.5 million jobs were lost overall in April — had even worse news about the impact of the pandemic on minorities. A measure of the employment to population ratio reflected that some minorities left the work force entirely, and therefore weren’t counted as part of the officially “unemployed.” The employment to population rate for black Americans dipped to 48.8 percent in April, matching a 1982 low. Just 51.3 percent of Latino adults were employed in April, the lowest on record.
Women lost 11.9 million jobs in April, more than the 10.4 million shed by their male counterparts, as coronavirus shuttered service industries where they tend to be heavily employed.
Unemployment for women spiked to 16.2 percent from 3.4 percent as recently as February, and men saw their jobless rate jump to 13.5 percent from 3.6 percent that month.
While both genders are suffering in the labor market, the opening gap marks a sharp reversal from what happened in the 2007 to 2009 recession. Back then, men shed jobs rapidly as industries like construction fell off a cliff, harming their labor market prospects for years. But as coronavirus closes restaurants and keeps people home from health care appointments, it is heavily hitting service sector employment, based on establishment survey data released Friday.
Women saw the biggest employment decline in the leisure and hospitality sector, the data show, though they also took a heavy hit in education and health services. In the latter, they accounted for about 83 percent of the employment decline.
As tens of millions of Americans lost their jobs in April, 78.3 percent of them classified their separation as a temporary layoff, while 11.1 percent said their situation was permanent.
That is an unusually high share of people on temporary layoffs, and it could be good news for the economy. Temporary layoffs accounted for just 26.5 percent of job losses in March and 13.8 percent in February. In fact, the share was at an all-time high in records dating back to the 1960s.
Short-term job losses suggest that hiring may come back quickly when businesses reopen. But there’s an important caveat: Temporary layoffs can always become permanent later, if the economic situation worsens.
Nearly 9 million workers in April reported that they were employed but absent from work for “other” reasons — meaning not because they were sick, on vacation or other typical reasons for absence. That’s about 7.5 million more people than in a typical April.
The Labor Department on Friday said that many of these people probably should have been recorded as “unemployed” instead. And if they had been, “the overall unemployment rate would have been almost 5 percentage points higher than reported” — or close to 20 percent.
The issue highlights how standard economic measures are struggling to reflect the unusual nature of this crisis. The Labor Department is trying to adapt, including by issuing special instructions to its survey-takers to record people out of work because of the virus as being on temporary layoff. But Friday’s numbers suggest there are still significant issues with the data.
Stocks on Wall Street rose on Friday, following global markets higher after upbeat comments from U.S. and Chinese officials about recent trade talks between the two countries.Stocks on Wall Street rose on Friday, following global markets higher after upbeat comments from U.S. and Chinese officials about recent trade talks between the two countries.
The S&P 500 rose more than 1 percent in early trading. European markets were higher after a broadly positive day in Asia.The S&P 500 rose more than 1 percent in early trading. European markets were higher after a broadly positive day in Asia.
Investors were cheered by the prospects of countries further reopening their economies, despite worries that those efforts could lead to a rise in infections. They were also bolstered by announcements from the United States and China that appeared to back their Phase 1 trade deal, which would bring their two-year trade war to a temporary truce. The White House had openly questioned China’s commitment to the deal in recent days, hurting stocks.Investors were cheered by the prospects of countries further reopening their economies, despite worries that those efforts could lead to a rise in infections. They were also bolstered by announcements from the United States and China that appeared to back their Phase 1 trade deal, which would bring their two-year trade war to a temporary truce. The White House had openly questioned China’s commitment to the deal in recent days, hurting stocks.
The optimism was widespread. Prices for U.S. Treasury bonds, which generally rise in troubled times, were down in early Friday trading. Oil prices also rose.The optimism was widespread. Prices for U.S. Treasury bonds, which generally rise in troubled times, were down in early Friday trading. Oil prices also rose.
But more grim economic data was released on Friday. The report on April payrolls in the United States is showed a loss of more than 20.5 million jobs — a breathtaking drop — and a sharp jump in the unemployment rate. Corporate earnings reports, too, are reflecting the heavy toll of the pandemic. Siemens, the European industrial giant, said profit fell 64 percent in the first quarter.But more grim economic data was released on Friday. The report on April payrolls in the United States is showed a loss of more than 20.5 million jobs — a breathtaking drop — and a sharp jump in the unemployment rate. Corporate earnings reports, too, are reflecting the heavy toll of the pandemic. Siemens, the European industrial giant, said profit fell 64 percent in the first quarter.
The stock market has shown a remarkable indifference to the dire outlook for the economy since it began to rally on March 23. That was the day the Federal Reserve signaled that it stood ready to pump an unlimited amount of dollars into financial markets to keep key borrowing markets from malfunctioning.The stock market has shown a remarkable indifference to the dire outlook for the economy since it began to rally on March 23. That was the day the Federal Reserve signaled that it stood ready to pump an unlimited amount of dollars into financial markets to keep key borrowing markets from malfunctioning.
China and the United States announced on Friday that they had held high-level trade talks. And despite increasingly tough rhetoric from Washington on trade, senior trade officials from both countries appeared to reaffirm the Phase 1 trade agreement they reached in January, which brought about a truce in their nearly two-year trade war.China and the United States announced on Friday that they had held high-level trade talks. And despite increasingly tough rhetoric from Washington on trade, senior trade officials from both countries appeared to reaffirm the Phase 1 trade agreement they reached in January, which brought about a truce in their nearly two-year trade war.
“Both sides agreed that good progress is being made on creating the governmental infrastructures necessary to make the agreement a success,” the Office of the United States Trade Representative said. “They also agreed that in spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner.”“Both sides agreed that good progress is being made on creating the governmental infrastructures necessary to make the agreement a success,” the Office of the United States Trade Representative said. “They also agreed that in spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner.”
President Trump had rattled financial markets on Wednesday by promising to review by the end of next week whether China was meeting its obligations under the agreement for increased purchases of American goods.President Trump had rattled financial markets on Wednesday by promising to review by the end of next week whether China was meeting its obligations under the agreement for increased purchases of American goods.
China has been importing more American food since the pact was signed. But China’s overall imports of American goods have fallen short of the administration’s initial hopes, because the coronavirus pandemic has hurt Chinese consumer spending and investment.China has been importing more American food since the pact was signed. But China’s overall imports of American goods have fallen short of the administration’s initial hopes, because the coronavirus pandemic has hurt Chinese consumer spending and investment.
The agreement itself set import targets over two years, however, not quarterly targets along the way. The trade representative office’s statement on Friday was less confrontational toward China than other recent statements from the administration have been.The agreement itself set import targets over two years, however, not quarterly targets along the way. The trade representative office’s statement on Friday was less confrontational toward China than other recent statements from the administration have been.
Vice Premier Liu He of China spoke on a conference call with Robert Lighthizer, the trade representative, and Treasury Secretary Steven T. Mnuchin, both countries said.
The German airline Lufthansa said Friday it would resume flights next month to popular European holiday destinations like the Mediterranean islands of Mallorca and Crete, and Sylt in the North Sea. Starting June 1, Lufthansa will double the number of aircraft in service, to 160.The German airline Lufthansa said Friday it would resume flights next month to popular European holiday destinations like the Mediterranean islands of Mallorca and Crete, and Sylt in the North Sea. Starting June 1, Lufthansa will double the number of aircraft in service, to 160.
The electronics and engineering giant Siemens, a bellwether for the German economy, reported that first-quarter profit fell by more than half as new orders slumped. Siemens said that sales had slipped a modest 1 percent compared with the first quarter of 2019. But new orders fell 9 percent largely because of lower demand for passenger trains. Profit fell 64 percent.The electronics and engineering giant Siemens, a bellwether for the German economy, reported that first-quarter profit fell by more than half as new orders slumped. Siemens said that sales had slipped a modest 1 percent compared with the first quarter of 2019. But new orders fell 9 percent largely because of lower demand for passenger trains. Profit fell 64 percent.
Frontier Airlines became the first U.S. carrier to announce plans to take the temperature of passengers before boarding, a move that would take effect on June 1. Anyone with a temperature of 100.4 degrees or higher will be denied boarding.
Reporting and research was contributed by Nelson D. Schwartz, Ben Casselman, Jeanna Smialek, Jack Ewing, Niraj Chokshi, Sapna Maheshwari, Stacy Cowley, Neal E. Boudette, Michael Crowley, Ken Vogel, Keith Bradsher, Liu Yi, Mohammed Hadi, Brooks Barnes, Liz Alderman, Carlos Tejada, Daniel Victor and Kevin Granville.Reporting and research was contributed by Nelson D. Schwartz, Ben Casselman, Jeanna Smialek, Jack Ewing, Niraj Chokshi, Sapna Maheshwari, Stacy Cowley, Neal E. Boudette, Michael Crowley, Ken Vogel, Keith Bradsher, Liu Yi, Mohammed Hadi, Brooks Barnes, Liz Alderman, Carlos Tejada, Daniel Victor and Kevin Granville.