The U.S economy lost 701,000 jobs in March, the Bureau of Labor Statistics announced this morning. The unemployment rate rose to 4.4% in March from 3.5%, a 50-year low, in February.
The survey behind the numbers was completed by March 12 so it didn’t capture the full carnage of job cuts in the last half of the month. For example, in the current survey retailers showed a loss of just 46,000 jobs. We already know that Macy’s alone has furloughed 130,000 workers in the last half of March. That has led economists to project that April job losses will be much, much higher. For example, Oxford Economist, a forecasting company, has projected that the unemployment rate will climb to 16% in May. That would mean the loss of 27.9 million jobs in three months, more than double the 8.7 million jobs lost during the 2007-2008 recession. Those 8.7 million jobs were lost over the course of more than two years.
An unemployment rate above 15% would be the highest since 1940, the eve of U.S. entry into World War II. Unemployment hit 10% in October 2009. The previous high was 10.8% in 1982. During the Great Depression unemployment peaked at 24.9% in 1933.
On the news the Standard & Poor’s 500 was down 2.41% as of 1:40 p.m. in New York and the Dow Jones Industrial Average was lower by 2.46. The NASDAQ Composite had lost 2.43% and the Russell 2000 small cap index was off 4.19%. The iShares MSCI Emerging Markets ETF (EEM) as don 2.27%.
Gold had climbed by 0.52% to $1644.60 an ounce. Silver, with its bigger exposure to industrial demand, was down 1.05% to $14.50 an ounce. Gold mining stocks were up with the VanEck Vectors Gold Miners ETF (GDX) ahead 0.88%. Barrick Gold (GOLD) was up 1.71%.
The yield on the 10-year Treasury was close to unchanged at 0.57%, down 2 basis points. The yield on the 2-year Treasury was 0.21%.
