This Week's State Of The Economy - What Is Ahead? - 08 May 2020

By: Taro Chellaram /Wells Fargo Economics & Financial Report/May 15, 2020

This Week's State Of The Economy - What Is Ahead? - 08 May 2020

U.S. - April Employment Plummets

  • April nonfarm payrolls confirmed what we already knew—the labor market is collapsing. By the survey week of April 12, net employment had fallen by 20,500,000 jobs.
  • The unemployment rate jumped 10.3 percentage points to 14.7%, the highest since World War II, but the BLS suggested the true rate was near 20%.
  • The employment-to-population ratio dropped 8.7 percentage points to 51.3%, the lowest on record.
  • The May nonfarm payrolls report will be awful as well. Initial jobless claims, a proxy for layoffs, have continued to pour in, reaching a cumulative 33 million.

 

Global - Global Economic Downturn Intensifies

  • The past week saw further evidence of a more widespread and faster downturn across the global economy.
  • Canadian March employment and Eurozone March retail sales both fell sharply. In addition, a much larger fall in the April global services PMI (to 24.0) than in the manufacturing PMI (to 39.8) suggests the negative effects from COVID-19 are most noticeable in the service sector.
  • The Bank of England held policy steady, but said a large decline in U.K. GDP was likely in H1-2020, suggesting a growing risk of further quantitative easing before too long.



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