US loses a decade of jobs growth in a few weeks

 

 

A decade's worth of jobs have been wiped out in the US in the past four weeks.

The coronavirus pandemic's devastation became ever more evident with the news that more than 5.2 million workers joined the unemployment lines this week.

The latest figure from the Labor Department taking into account last week's first flush of unemployment claims brings the four-week total to about 22 million - about the same number of jobs created in the past decade after the GFC revival.

Every part of the economy has been cratered by the virus lockdown, including hotels and restaurants, mass retailers, manufacturers and white-collar service providers like legal firms.

 

"There's nowhere to hide," said Diane Swonk, chief economist at Grant Thornton in Chicago. "This is the deepest, fastest, most broadbased recession we've ever seen."

Share benchmarks rose despite new jobless data showing the number of people in the US applying for the dole continue to come in near record high levels.

The S&P 500 added 0.7 per cent in early New York trading, while the Dow Jones Industrial Average advanced 36 points, or 0.2 per cent. The Nasdaq Composite Index rose 1 per cent.

It continues some seemingly odd responses from Wall Street to the outflow of negative data after the S&P 500 rose after some shocking unemployment news earlier this month.

Figures on new-home construction and the Federal Reserve Bank of Philadelphia's survey of manufacturing conditions also showed a sharper decline than expected last month.

 

A man hands out unemployment paperwork to residents in Florida. Picture: AP
A man hands out unemployment paperwork to residents in Florida. Picture: AP

"The unemployment rate will shoot up to double digits, but we also know that there are stimulus checks," said Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers.

He said the question is whether American consumers, who have been the backbone of the economy in recent years, use those checks to stimulate the economy once the lockdown lifts.

Meanwhile, European stock markets climbed despite losses elsewhere, as investors reacted positively to plans to finally roll back some lockdown restrictions - in turn, bringing back spending and jobs.

Oil prices were up 24 hours after plummeting to an 18-year low.

 

Oil prices rose slightly. Picture: Supplied
Oil prices rose slightly. Picture: Supplied

"Investors are shrugging off the pessimism and are willing to focus on more positive things," AvaTrade analyst Naeem Aslam said of the signs of investor optimism.

The market in Frankfurt climbed one per cent after German Chancellor Angela Merkel revealed preliminary plans to unlock the lockdown that plunged Europe's biggest economy into recession.

"Markets in Europe appear to be stabilising a touch on some limited relaxation of lockdown restrictions across the region," said CMC Markets analyst Michael Hewon.

"Germany has become the latest European country to say it would be loosening some measures on its lockdown over the coming weeks, which is clearly helping European sentiment for now.

 

London’s Tower Bridge. Has the UK’s COVID-19 crisis finally peaked? Picture: Getty
London’s Tower Bridge. Has the UK’s COVID-19 crisis finally peaked? Picture: Getty

"Reports that the UK has seen a peak in its infection rates is also helping."

Total retail sales sank 4.3 parent in the UK in March, but London stocks still inched up by 0.3 per cent.

"The crisis continues; the retail industry is at the epicentre and the tremors will be felt for a long while yet," said BRC chief Helen Dickinson.

Major equity benchmarks in Japan and Hong Kong closed lower, while the Shanghai Composite Index ended the day up 0.3 per cent.

 

Originally published as US loses a decade of jobs growth in a few weeks


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