Be prepared for a shock — the employment report for March that’s coming out on Friday may not be as bad as people are expecting.
But don’t misunderstand what I’m saying.
The job market right now is the worst it has been in over a decade. But quirks in how the monthly numbers are derived might make the statistics look a little less atrocious than they really are.
As a point of reference, the “experts” are expecting the US Labor Department to announce that 100,000 jobs were lost in March and that the unemployment rate jumped to 3.8 percent.
That compares with a whopping 273,000 new jobs that were created in February and a jobless rate for that month of just 3.5 percent.
Here are some reasons Friday’s initial figures for March might not be as bad as they could have been.
For one thing, the Labor Department’s surveys of companies and of individuals are done during the week that contains the 12th day of the month. And in March this wasn’t the week all the strictest coronavirus rules went into effect. It also wasn’t the week that the bulk of layoffs and furloughs began.
New claims for unemployment insurance suddenly exploded the week that began on March 16 and ended on the 21st. That’s when new jobless claims spiked to an all-time high of 3.3 million.
So the figures the Labor Department will release on Friday missed the worst of the job losses by a few days. ADP, which does a private survey of jobs, reported a loss of only 27,000 jobs at companies in March because of this timing glitch.
For those of you who like bad news, don’t worry. The figures will catch up to the devastation in the April figures released in early May. And downward revisions to the March numbers will trickle in over the next months and even years.
The true horror of what we are going through won’t be missed by history.
Speaking of history, you have to go back more than 10 years to find a period of employment that is this bad. The last time there was any decline in the monthly job figures was in September 2010 when the economy shed 65,000 jobs. In March 2009, the Labor Department reported an enormous decline of 800,000 jobs.
We could’ve beat that record this time. But because of the quirks I’m telling you about, the job-loss figures might be spread out more evenly over several months.
Here’s another thing: The standard when considering if a job exists isn’t very strict.
If someone is paid for any part of a month — even for one hour — that person is considered to have had a job and the job is considered to have existed.
In our current predicament, lots of people were paid in early March before their salaries were suddenly cut off.
Friday’s report won’t be good news. But it might not be as bad as it could have been.