US: Coronavirus impact on the labour market
The weekly data published by the US Department of Labor (DoL) on March 26th revealed that the Initial Jobless Claims jumped to an all-time high of 3,283,000. Eren Sengezer from FXStreet analyzes the impact of Covid-19 on the US labour market.
“Wall Street's main indexes stretched higher to suggest that this reading had little to no impact on the market sentiment because of more people are now eligible to apply for unemployment insurance.”
“People who are expected to be called back to work are counted as 'unemployed'. However, the BLS states that those who have no job and are not looking for one are counted as 'not in the labor force'.”
“The most likely scenario is that there will be a large drop in the Labor Force Participation Rate and a modest increase in the Unemployment Rate in the near term.”
“Since the Unemployment Rate is a lagging indicator, labor market data for April and May will paint a more accurate picture of the current situation.”