Jobless Friday

Another day, another rude awakening. The 701,000 jobs loss for March was the worst monthly drop since the bottom of the Great Recession, when the NFP count plunged by 706,000 in December 2008.

Except back then it took fully 11 months of successively deeper drops to achieve what happened this time during month #1 of the Covid-recession. By the time April is reported on the first Friday next month, of course, the plunging red line on the right margin will be truly off the charts and in the  multi-millions, signifying a wholly new kind of recessionary ball game.

Moreover, that’s just the diluted version of what’s going on because it reflects the entire labor market. But if you look at ground zero for the shutdown—-bars, restaurants, hotels, resorts and other hospitality and leisure venues—the real picture of the hard stop comes screaming through. To wit, the 459,000 drop during March was actually 6.5X larger than the worst monthly drop during the Great Recession (71k in April 2009).

Needless to say, during April the drop will easily exceed a million leisure and hospitality jobs. In all, by the end of Q2 we would expect that upwards of 2.5 million of the 3.0 million gain in leisure and hospitality jobs since the pre-crisis peak in November 2007 will have vanished, some of them permanently.

To be sure, the paint-by-the-numbers Keynesian will probably identify the chart below as a glimmer of good news in this otherwise dismal March report, but that’s because they erroneously believe that prosperity stems from spending, when in truth it arise from production.

Still, it is worth noting that since March 2011, the government sector (red line) has generated 5,000 new jobs per month year-in and year-out, and didn’t miss a beat in March when another 12,000 pay-rollers were added.



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