NEW YORK, April 3 (Reuters) - The U.S. economy abruptly ended a historic 113 straight months of employment growth in March, as stringent measures to control the novel coronavirus pandemic shuttered businesses and factories, all but confirming a recession is underway.
The Labor Department said employers cut 701,000 jobs last month after adding a revised 275,000 in February. The unemployment rate shot up to 4.4% from 3.5%. Economists in a Reuters survey forecast a decrease of 100,000 jobs last month. Unemployment was seen rising to 3.8%.
MARKET REACTION:
STOCKS: After beifly adding to losses, S&P 500 e-minis EScv1 were down 6 points, or 0.24%.TREASURIES: Benchmark 10-year notes US10YT=RR last rose 9/32 in price to yield 0.5979%, from 0.627% late on ThursdayDOLLAR: The dollar index =USD rose 0.559%
JOHN DOYLE, VICE PRESIDENT OF DEALING AND TRADING, Monex INC, WASHINGTON
“Most people going into this number were going to take this with a grain of salt only because of the shutdowns and furloughs that were happening toward the end of the month. Everyone is expecting April’s print to be a little more clear on what the actual situation is. But today’s jobs number and yesterday’s jobless claims report paint a picture of how bad things can actually be. But we’re expecting things to be very poor which is why you’re seeing limited reaction in the currency market so far.”
STEVE RICK, CHIEF ECONOMIST AT CUNA MUTUAL GROUP
“Frankly, this report is a looking glass into the past and doesn’t say a whole lot. This data demonstrates the state of the jobs market during the week of March 12th and things only went downhill quickly from there.”
“We won’t really see a true marker of our current labor market positioning until the April jobs report. That said, we are clearly within the confines of a very steep slowdown and I expect unemployment could inflate to up to 7% towards the middle of the year.”
“Unlike 2008, the recession that we’re navigating through right now is characterized by a lot of uncertainty instead of fractures in the system and is hinged on an unforeseen pandemic to which we do not yet know an end nor a cure. Both markets and economy as a whole are very reliant on the healthcare sector, and things are not going to improve before the pandemic is clearly lassoed and wrangled.”
JJ KINAHAN, CHIEF MARKET STRATEGIST AT TD AMERITRADE IN CHICAGO
“No one knows what to do with this, is what this tells me. We knew it would be bad after the last two claims numbers, so now what. No shock that leisure and hospitality lost jobs. The one I was a little surprised with was healthcare and social services, so what I am thinking is that is really the social services of it more than healthcare because they probably just had to shut down, we know healthcare has a need. I’m not surprised average hourly earnings are up because restaurant and bar jobs are gone and those tend to be lower wages that are reliant on tips.
“It will be one of those days where they say we don’t know what to do with this so we are just going to trade on other things and just get through the week. The interesting thing will be to see what we do into the close. There has been some pressure on the close as people may not necessarily want to hold things over the weekend so we will see if that happens again. But if you look we were pretty muted overnight, meaning 50 S&P points, but compared to where we have been lately, not a big reaction anywhere. The only thing that moves a lot was a very strong follow through in crude oil. But other than that it is almost like a normal day with a little bit of movement.”
JUSTIN LEDERER, TREASURY ANALYST, CANTOR FITZGERALD, NEW YORK
“Basically it was a miss from what the survey was, but it’s not having a major effect on the market because there’s so much going through the system now, we don’t know exactly what’s happening and it’s hard to gauge the impact. It doesn’t show the whole story.”
“It’s important to see the numbers going forward and to see how the aid packages play out. In the bigger picture this data doesn’t mean that much, until we get a better picture of how the whole situation plays out. This is the smallest market impact I’ve ever seen from the payrolls number.”
