Newsletter: The American Jobs Machine Has Shut Down

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Keep an eye on the weekly U.S. jobless claims report out today to gauge how quickly and deeply the coronavirus pandemic is crashing into the economy. Jeff Sparshott here with the latest on the labor market and broader economy.

Welcome to the Machine

The great American job machine just ground to a halt. As a result of the coronavirus pandemic, more than 1 million Americans are forecast to have filed for unemployment benefits last week, marking a dramatic end to a historic national job expansion that started in 2010, Eric Morath and Jon Hilsenrath report.

Until March, U.S. employers added jobs for a record 113 straight months, causing payrolls to grow by 22 million. In the process, millions of people—including low-wage hourly laborers, disabled people, minorities, former inmates and others—found work. The unemployment rate had been at levels not seen since the 1960s. Wages started picking up after lagging during the early stages of the expansion. The strong labor market kept the U.S economy humming straight through a European debt crisis, Japan’s tsunami, a Chinese economic slowdown, a domestic manufacturing slump, volatile energy prices and a global trade war. And then in a matter of days it stopped.

Millions of Americans, already fearful the new coronavirus could infect them or their families, now have another worry: When will the job machine start again and can they hold out until it does.

WHAT TO WATCH TODAY

The Bank of England releases a policy statement at 8 a.m. ET.

Group of 20 leaders hold a video teleconference at 8 a.m. ET.

U.S. jobless claims are expected to rocket to 1.5 million from 281,000 a week earlier. That would top the previous record of 695,000 set in 1982. (8:30 a.m. ET)

U.S. advance trade in goods figures for February are out at 8:30 a.m. ET.

U.S. gross domestic product growth for the fourth quarter is expected to advance at a 2.1% pace, unchanged from an earlier estimate. (8:30 a.m. ET)

The Kansas City Fed’s manufacturing survey for March is out at 11 a.m. ET.

The White House coronavirus task force holds a press briefing at 5 p.m. ET.

China’s industrial profits for February are out at 9:30 p.m. ET.

Note: This is a partial listing of key economic events and subject to change.

TOP STORIES

It’s a Start

The Senate approved the largest economic stimulus package in recent memory, moving the estimated $2 trillion bill to the House as Congress seeks to give American families and businesses a financial shield against the ravages of the new coronavirus pandemic. The House is set to consider the legislation on Friday.

The emergency relief package would help stabilize the coronavirus-battered economy—but likely isn’t enough to bring it back to health. Preliminary data suggest that the U.S. economy is already shrinking, as businesses close and unemployment soars. The depth of the economic decline in coming months will depend on how quickly Washington can deliver checks to cash-strapped households and businesses, as well as whether a treatment is found and how soon shutdowns are lifted, Kate Davidson and Josh Mitchell report.

Underscoring the rapidly changing outlook, JPMorgan Chase revised down its growth outlook for the third time in three weeks on Wednesday. “Such is the pace of events,” economists Michael Feroli and Jesse Edgerton wrote in a note to clients.

What’s in the emergency aid bill? We’ve broken it into four parts: the top lines, households and workers, business and banking, and personal finance and taxes.

$2 trillion could be just the start. If the stimulus isn’t doled out fast enough or the pandemic drags on longer than expected, even this historic rescue package might not be enough, Justin Lahart writes.

President Trump said restrictions on economic activity could be lifted in some parts of the country but not others as his administration works to develop a plan for how Americans could return to work in a few weeks without exacerbating the spread of the virus in the U.S., Rebecca Ballhaus and Stephanie Armour report.

The U.S. now trails only China and Italy in the number of confirmed coronavirus cases, with almost 70,000 infections on Thursday morning, according to Johns Hopkins data. India, meanwhile, implemented the world’s most extensive stay-at-home order.

How much should U.S. households be willing to pay financially to reduce the risk of deaths from the new coronavirus? University of Chicago researchers Michael Greenstone and Vishan Nigam did some calculations and came up with a number: $7.9 trillion. The figure is based on a measure known as the “value of statistical life,” a calculation of how much people already pay in day-to-day life to reduce the risk of mortality in the coming year, Gwynn Guilford reports.

The novel coronavirus is creating an economic doom loop. Western retailers are suspending and canceling clothing orders, threatening millions of factory jobs in Asia just as China shows signs of recovering from the worst of the coronavirus outbreak. Among the first to be hit by the consumer shutdown in the West are suppliers to the world’s “fast-fashion” giants, like H&M. They are now pausing or canceling factory orders, boding ill for Asian manufacturers of other, slower-moving consumer goods like cosmetics, smartphones and cars, Jon Emont reports.

What is essential? In Europe, the answer can depend on where you live. Across the continent, government rulings on what are essential products and services vary widely, even over short distances. In France, baguettes are sine qua non. Across the border in Belgium “french fries” are vital, and next door in the Netherlands, coffee shops—selling legal marijuana—are a must, Valentina Pop and Nick Kostov report.

The WSJ has lowered its paywall for live coronavirus coverage. Follow along here.

TWEET OF THE DAY 

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WHAT ELSE WE’RE READING 

Saving lives and saving the economy aren’t in conflict. “Our paramount concern at this moment should be to slow the spread of this virus and equip our health care system to effectively respond,” the Aspen Institute’s Economic Strategy Group wrote. “We will hasten the return to robust economic activity by taking steps to stem the spread of the virus and save lives.” The policy group includes four former Treasury secretaries—Timothy Geithner, Henry Paulson, Lawrence Summers and Robert Rubin—as well as former Federal Reserve chairs Ben Bernanke and Janet Yellen.

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