By Scott J. Brown, Ph.D., Raymond James
The Job Market – The April Employment Report was flawed, reflecting issues with data collection, classification, and methodology. However, results were consistent with an unprecedented, sharp deterioration in labor market conditions, mostly at the lower rungs. Payrolls fell by more than 20 million, nearly erasing the number of jobs gained since the financial crisis. The unemployment rate jumped to 14.7%, but that understated the problem. Correcting for a classification issue, the figure would have been closer to 20%. So many lower-income workers were jettisoned in April, average hourly earnings surged. None of this tells anything about where we’re going. While many are hoping for an economic rebound, recovery will take time and there is going to some permanent job destruction.
This Week – Retail sales are expected to have fallen further in April. Industrial production should post a large decline. Inflation reports should reflect the drop in gasoline prices and weak demand. Thursday’s jobless claims figures are expected to show 20% of workers (one in five!) having filed a claim in the last eight weeks. The Peterson Institute for International Economics (PIIE) will host Fed Chair Powell for a live streaming event on Wednesday.