The devastation of the coronavirus pandemic on the U.S. labor market will be on display this week, with Friday’s jobs report likely to show the unemployment rate soared to nearly 20% and employers cut millions more from their payrolls in May. The Labor Department’s data may mark the worst of the fallout from the disease as states have started to lift the shutdown orders that brought demand and the economy to a standstill. The median forecast in a Bloomberg survey calls for the jobless rate to rise to 19.6%, the highest since the Great Depression era of the 1930s. Payrolls probably declined by almost 8 million after a whopping 20.5 million slump in April.
What Bloomberg’s Economists Say:
“Bloomberg Economics expects unemployment to peak near 20% in the second quarter and to then fall toward 10% by year-end. To be sure, this reflects an impressive rebound in the economy, but a clearly incomplete one, which leaves behind a significant share of the newly jobless.”
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Unemployment data across Europe are set to paint a similarly dismal picture, yet another reason for the European Central Bank — which meets Thursday — to boost its stimulus measures. Rate decisions are also due in Australia and Canada.