Fed’s James Bullard says the jobs report on Friday will be one of the worst ever

Fed’s James Bullard says the jobs report on Friday will be one of the worst ever
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  • St. Louis Federal Reserve President James Bullard said Wednesday that Friday’s jobs report will likely be one of the worst in American history.
  • Bullard’s comments came minutes before ADP reported that private payrolls shed more than 20 million jobs in April amid coronavirus shutdowns.
  • Economists expect the Labor Department’s jobs report on Friday to show that the U.S. unemployment rate to have rocketed to 16% in April from 4.4% in March.

St. Louis Federal Reserve President James Bullard said Wednesday that the April jobs report being released on Friday will likely be one of the worst in American history.

“But that’s kind of expected because you’re using the unemployment insurance program to provide pandemic relief,” Bullard told CNBC’s Steve Liesman. “That’s exactly what we want to do.”

Bullard’s comments came minutes before ADP reported that private payrolls shed more than 20 million jobs in April as employers slashed worker positions amid widespread shutdowns and forced government closures to help contain the spread of the coronavirus.

The decline totaled 20,236,000 and represented by far the worst loss in the survey’s 18-year history. Despite the eye-watering number, the 20.2 million wasn’t as bad as the 22 million that economists surveyed by Dow Jones had forecast.

But investors await the Labor Department’s key jobs report on Friday, when economists expect to see the U.S. unemployment rate to have rocketed to 16% in April from 4.4% in March. Dow Jones economists expect nonfarm payrolls to have declined by about 21 million last month.

“The unemployment rate is going to be extremely high,” Bullard said. “We think 20% isn’t unlikely, could even be higher than that. You’ve also got this PPP program, which has encouraged firms to keep their workers on their payrolls even though they’re not doing that much business.”

“It’s not surprising. It’s a pandemic. It’s a shutdown situation,” he continued, adding that he long maintained that the main impact from the crisis would be in the second quarter.

Source: CNBC

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