The monthly employment report is both disrespected for being a lagging economic indicator and revered for measuring the most important economic signal.
In the week ahead, the March jobs report will be released on Friday. It will be ignored, and for good reason.
Unemployment has exploded across the nation. Millions of people have been thrown out of work by COVID-19. Hotels are closed. Cruise ships are docked. Airplanes are parked. Restaurants are dark. Entire industries have come to a halting, crashing stop in the effort to slow the spread of the coronavirus.
The disease has rendered the March jobs report virtually meaningless for investors.
The data used for the monthly report is generated from two surveys, one of American households and one of American companies. The household survey is where the headline unemployment rate comes from. The poll of companies measures how many jobs were created or eliminated.
In March, the same week Americans were asked about their employment status by the Bureau of Labor Statistics was the same week the World Health Organization declared the COVID-19 outbreak a global pandemic. It was also the same week that saw the stock market suffer it’s worst single day drop since the 1987 crash. And it was the week President Trump declared a national emergency.
American companies have acted swiftly — too swift for the government job surveys to capture. Moody’s Analytics Chief Economist Mark Zandi predicts five to six million lost jobs in March according to Fortune. The number published on Friday won’t be anywhere near that catastrophic.
Even though the job destruction is all too real right now for millions of Americans, reality takes awhile to be reflected in the data.
Tom Hudson hosts “The Sunshine Economy” on WLRN-FM, where he’s vice president of news. Twitter: @HudsonsView.