MNI REALITY CHECK: US April Jobless Rate Could Hit '30s Level

--Devastated By Covid-19, Payrolls To Tumble 

By Brooke Migdon

     WASHINGTON (MNI) - U.S. April payroll data due Friday will likely show

millions of jobs lost, sending unemployment to Great-Depression-levels, and

recruiters and industry leaders told MNI that coronavirus shutdowns may force

businesses to close for good, even as new government benefits may cause a drop

in the labor force participation rate.

     Key points from their comments ahead of the May 8 Bureau of Labor

Statistics' monthly employment report:

     **High unemployment could persist for a while as businesses affected by

shutdowns and social distancing guidelines close their doors permanently.

     **Some employers are finding it difficult to compete with enhanced

unemployment benefits offered under the CARES Act. Some unemployed workers

receiving these benefits have stopped looking for a new job altogether, meaning

labor force participation rate has likely slipped.

     **Service-sector job cuts should lead payroll declines in Friday's report.

     ANTHONY NIEVES, CHAIR OF THE INSTITUTE FOR SUPPLY MANAGEMENT

NON-MANUFACTURING BUSINESS SURVEY COMMITTEE:

     "Almost every industry [in the non-manufacturing sector] has either shut

down almost entirely or has definitely furloughed people," he told MNI in an

interview. "Certain industries within the services sector have just been

decimated by this, specifically the hospitality industry."

     Nieves said "there will be some business fatality" as long as state-wide

stay-at-home orders and mandatory shutdowns are enforced, noting that this could

lead to prolonged unemployment.

     SEAN KENNEDY, EXECUTIVE VICE PRESIDENT OF PUBLIC AFFAIRS FOR THE NATIONAL

RESTAURANT ASSOCIATION:

     "Two thirds of the employees working in restaurants in February are now

unemployed," he told MNI in an email, adding that the restaurant industry has

been "hit harder by the pandemic shutdown than any other industry."

     Kennedy said the NRA is preparing to work with Congress to support

restaurants, the nation's second largest private-sector employer.

     TORI EMERSON BARNES, EXECUTIVE VICE PRESIDENT OF PUBLIC AFFAIRS AND POLICY,

U.S. TRAVEL ASSOCIATION:

     "It wasn't really until the stay-at-home orders that leisure travel really

stopped," she told MNI in an interview. "Since then, the entirety of the

industry has been shut down." Business travel began to halt in late February and

early March after the U.S. government began to restrict foreign travel, Emerson

Barnes said.

     "There's no customers to have any revenue to come in at all," she said.

     "As of May 1, we had calculated about 8 million jobs lost within the travel

industry," since the onset of the pandemic, she said, adding that the

travel-related economic impact of coronavirus pandemic is projected to be nine

times worse than the two-year recovery following 9/11.

     YVONNE ROCKWELL, FRANCHISE OWNER AT EXPRESS EMPLOYMENT PROFESSIONALS IN

SANTA CLARITA, CALIFORNIA:

     Rockwell said it's difficult for some employers to compete with

unemployment benefits, which were increased by USD600 per week under the CARES

act signed by President Donald Trump in March.

     In some cases, unemployed workers are making more money receiving

unemployment benefits than at the job that they lost, according to Rockwell,

meaning many people are not currently looking for work and have therefore exited

the workforce under BLS standards.

     Rockwell expects a "huge influx of people coming into the market looking

for work" after enhanced government benefits dry up. Unemployed workers

similarly flooded the labor market during the global financial crisis after

benefits extended under the Obama administration were cut off, she said.

     **Initial unemployment claims neared 27 million during the reference period

for Friday's report, erasing all the job gains since the 2008 recession.

Analysts expect April's nonfarm payrolls to fall by 20.5 million, which will

catch the millions of unemployment claims missed in the March report.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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