Jobs are vital to the general well-being of the overall economy and individual livelihoods. So, when people start losing jobs that’s really bad.
Fortunately, there are metrics to measure the extent to which jobs are being created or lost. One metric comes from ADP, which is the company responsible for processing payrolls for millions of Americans:
Now, there is an official jobs report that is produced by the government. The metric above a little different. It’s produced by a private company and is released two days before the official government report. I find that kind of funny, like it’s some petty form of metric oneupmanship.
But to the chart itself, what we see is what we would expect - during recessions there are a lot of lost jobs. We also know initial jobless claims recently skyrocketed and that the data above only reflects a small portion of those ongoing losses from the coronavirus. This means that we are probably already in a recession (as if the -37% drop in the market didn’t send enough of a signal).
Unfortunately, this jobs report is monthly - so we will have to wait another 30 days to see the true impact of the virus on the economy. It won’t be pretty but that’s to be expected when you shut down the economy for social distancing. Let’s hope it continues to slow the spread.