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A Shocking - Yet Still Understated - Jobs Report

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What can one say when even the economists, strategists and commentators can't seem to find the right words to describe a particular economic number as it rolls off the proverbial tape?

Friday's nonfarm payrolls report was greeted with a collective gasp, as U.S. companies shed a whopping 701,000 positions in March, pushing the jobless rate up almost a full percentage point to 4.4%.

The numbers marked the most monthly job losses since March 2009 and the end of a 10-year run of employment gains as the start of the biggest full-stop in the economy in history began to unfold.

At the same time, they were only a partial reflection of the unprecedented shutdown of the U.S. economy in the face of the worst health pandemic the world has seen in more than 100 years, and the damage it is already inflicting on the jobs market. 

"Note that the March survey reference periods for both surveys predated many coronavirus-related business and school closures that occurred in the second half of the month," the BLS itself said.

"Today’s data is likely more than the tip of the iceberg, but the entire mass of this threat has yet to be seen," said E*TRADE Managing Director Mike Loewengart. 

About two-thirds of the drop occurred in leisure and hospitality, mainly in food services and drinking places, where shuttered doors amounted to 459,000 fewer jobs last month. Other notable declines also occurred in healthcare and social assistance, professional and business services, retail trade, and construction, the Labor Department said.

Even then, the numbers were a rearview-mirror look at a jobs market largely still unaffected by the coronavirus outbreak, which as of the end of February remained a far-away phenomenon that had not yet directly begun to impact American businesses.

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