It’s tough to remember the last time a jobs report mattered so little.
There was a stunning 273,000 jobs added to the economy in February, the Labor Department reported Friday. The figure blew past expectations of 175,000 new jobs, but did nothing to reverse the stock market’s downward moves in Friday morning’s trading. (The trend was only slightly reversed late Friday, thanks to Boston Federal Reserve President Eric Rosengren saying the Fed may need to be permitted to buy “broader range of securities or assets.”)
By now, Wall Street realizes that there is going to be a lag in the economic data we receive that will reveal the impact of coronavirus concerns in the U.S. While the stock market has traded on coronavirus news since January—when the virus was identified in China—fear only took hold two weeks ago as more cases emerged outside of the nation.
While there is plenty of fear in the market, helpful economic data has been scarce. Anecdotally, we know that conferences have been cancelled, airlines are cutting capacity, businesses are telling employees to work from home, and that restaurants, hotels, and other small businesses will feel the pain from the reduced activity. Quantifying the impact, however has been challenging.
The first drip of relevant economic data will come Thursday, at the hands of the Labor Department’s weekly jobless claims report. It’s the most timely look at the labor market and will show the number of people who filed for unemployment for the week ending on March 7. Last week’s data showed 216,000 filing initial claims for unemployment benefits, a drop of 3,000 from the previous week. The more closely-watched four-week moving average of initial claims ticked up to 213,000, an increase of 3,250 from the previous week.
But workers in the “gig” economy—independent contractors, temporary employees, anyone not employed in a full-time, permanent position—are often among the first to lose work, and they can’t file for unemployment. They just stop working, and therefore won’t be counted in the Labor Department’s data.
Another big clue into the underlying health of the U.S. labor force will come on March 17 when the Labor Department releases the Job Openings and Labor Turnover Survey, known as Jolts.
To be sure, that data will only cover January—well before coronavirus worries had businesses and people cancelling events, stocking up, and staying at home. That said, clues to how the labor market fared before the coronavirus could show whether or not it will be resilient in the face of it. For example, while some economists were hopeful about the number of people who found new jobs in February, it’s worth noting that last month’s Jolts report, which covered December, showed job openings slide to a two-year low, showing less of a demand for labor in more halcyon times.
Uncertainty posed by the coronavirus could accelerate that.
Write to Carleton English at email@example.com