What's going on?

Data out on Friday showed the number of workers in the US fell by more than 700,000 last month � much more than the 100,000 drop economists predicted. And there are a lot more coronavirus-shaped hazards still to come�

What does this mean?

March was the first time the number of American jobs had fallen since September 2010, and the drop was the biggest since March 2009. And with almost seven million workers newly filing for unemployment benefits last week � double the previous week�s record � the unemployment rate rose to 4.4% from an estimated 3.8%.


The leisure and hospitality industry alone lost 450,000 jobs, which hit states with lots of restaurants and hotels � like California and Nevada � the hardest. But since those businesses were among the first to shut their doors and furlough their workers, other industries will probably see their job losses spike in future data. And that�s the good news�

Why should I care?

For markets: Now for the bad news.

Investors seemed to shrug off Friday�s data, and here�s why: it counted Americans still working in mid-March � before much of the country was locked down � as employed, making this already worse-than-expected report look better than the current reality. Economists reckon the unemployment rate right now is actually closer to 10%, and will rise to 15% � or 20 million jobs lost � by the end of this month (tweet this). That�s a level of unemployment not seen since the Great Depression. And based on the relationship between unemployment and economic growth, economists reckon the US economy as a whole could shrink by 12-15%.

Zooming out: More of the same in Europe.

Similarly devastating unemployment figures are likely to come out of the eurozone. Data on Friday showed Spanish and Italian economic activity declining by the most of any country ever recorded, meaning job losses are sure to follow. Overall, economists predict the eurozone economy is likely to shrink by as much as 10%.