Moody’s says ‘the COVID-19 recession is over’ after 2.7million jobs were cut in May, well below the 9million projected, but ‘recovery will be a slog’
- On Wednesday, ADP National Employment Report revealed 2.76million jobs were lost in the month of May, well below the Wall Street projection of 8.75million
- Moody’s Analytics economist Mark Zandi says the May number is a sign that the coronavirus-induced recession is over
- May’s numbers were less than April’s record loss of 19.557million jobs
- Zandi warns that ‘the recovery will be a slog until there’s a vaccine or therapy that’s distributed and adopted widely’
- Here’s how to help people impacted by Covid-19
The worst of the COVID-19 recession is over after May job losses were less than Wall Street had predicted, according to a new economist report.
On Wednesday, ADP National Employment Report revealed that companies lost 2.76million jobs last month. While that number is startling, it’s well below the 8.75 million jobs estimated to be lost for the month.
‘The good news is I think the recession is over, the COVID-19 recession is over, barring another second wave, a major second wave, or real serious policy errors,’ Mark Zandi, the chief economist at Moody’s Analytics said to CNBC.
Moody’s Analytics put the private payrolls report together with ADP. However, ADP’s count can be volatile and vary from Wall Street estimates.
Moody’s Analytics economist Mark Zandi claims the ‘COVID-19 recession is over’ after 2.76million jobs were lost in the month of May, well below the projection of nearly 9million job cuts. Hundreds of people pictured in line outside a downtown Brooklyn unemployment office waiting for their EBT Food Stamp cards on May 12
The news of a improving economy comes as states have reopened and businesses reopen their doors such as this Miami restaurant pictured May 28
Weekly jobless claims have slowly tapered off following an initial spike in late March
May’s job loss report was particularly optimistic following April’s record loss of 19.557million positions.
However, Zandi warns that ‘the recovery will be a slog until there’s a vaccine or therapy that’s distributed and adopted widely.’
In total, more than 40million Americans have filed unemployment claims over the past two months as the coronavirus pandemic paralyzes the economy.
Last week’s jobless claims are the first signs of a slowing layoff pace and as states open up and people return to work.
Continuing claims, meaning the number of workers receiving unemployment benefits for at least two weeks, sunk by nearly 3.9million.
Economist Mark Zandi warns that ‘the recovery will be a slog until there’s a vaccine or therapy that’s distributed and adopted widely’ in response to COVID-19
More than 40 million new claims for unemployment benefits have been filed in the past two months when the coronavirus started paralyzing the US economy
Continuing claims peaked at 24.9million on May 9, but that was three days before the sample week that ADP and the Labor Department use for their estimates.
‘The job loss is abating. Layoffs appear to have peaked in late March and early April and they were winding down by early May. I would expect job growth to resume in June,’ Zandi said.
Still, Zandi says he expects the unemployment rate to rise above 20 percent – the worst rate since the Great Depression – adding that some 50million Americans will be impacted by a coronavirus-induced recession.
The government’s initial estimate for unemployment was 20.5million out of work – but that number was likely under-counted due to a discrepancy where millions of workers were classified as ‘absent from work’ instead of unemployed.
Zandi projects that unemployment will likely level off around 10 percent, which was its peak level in the crisis, and remain there until Congress approves more fiscal stimulus to get the economy running again.