The April 2020 jobs report was the worst ever, by many measures. The unemployment rate jumped to 14.7%, the highest since record-keeping began in 1948. The economy lost 20.5 million jobs, more than ten times the largest prior one-month decline on record. And job losses were spread more widely across industries while job gains were concentrated more narrowly than ever before, as measured by something called the diffusion index.
But from our front-row seat observing the labor market and high-frequency economic data, we at ZipRecruiter are seeing several signs of hope.
Employers are coming back
The COVID-19 crisis cut the weekly number of new jobs being posted on ZipRecruiter in half by mid-April. But in the four weeks since, growing numbers of employers have signed up for ZipRecruiter accounts each week and jobs posted by ZipRecruiter subscribers have risen 16%.
Job seekers are coming back
Suspected COVID-19 infections or exposures, quarantines, school closures, and stay-at-home orders caused many job seekers to pause their job search activities when the crisis first struck. But job seeker registrations have now climbed 50% since early April and the number of new applicants participating in the ZipRecruiter marketplace is ticking upwards. Many job seekers are eager to get back to work.
Credit is flowing
The financial panic of 2008 choked off the supply of credit, pushing the economy into a deeper recession than might otherwise have occurred. But this time around, companies are managing to secure large loans at favorable rates, partly thanks to unprecedented interventions by the Federal Reserve. Researchers have found that employment recovers slowly after financial crises, but tends to bounce back more quickly after recessions sparked by other causes, so functioning credit markets are a good sign for the labor market.
May rent payments are rolling in
According to the Wall Street Journal, “More households paid their rent in the first week of May than were expected, a sign that expanded unemployment benefits and stimulus payments are helping some people make their bills.” After many Americans failed to pay rent on time in April, observers feared that delinquencies would be even worse in May. That could have triggered a systemic breakdown—mortgage defaults, foreclosures, credit market troubles. But the opposite happened.
Other economic indicators have stabilized
Harvard economist Raj Chetty and colleagues are using private company data to track economic activity across the country. They find that most measures of economic activity—such as consumer spending, hours worked, and small business openings—all fell off a cliff in March but have not deteriorated further since mid-April.
In other words, the week the April jobs report surveys were conducted—April 12 to 18, 2020—might just have been the week the economy bottomed out. The report captures the enormous labor market challenge we must all work together to overcome. Early signs suggest we’re making some progress—employers and job seekers, borrowers and lenders, tenants and landlords, finally moving in the right direction again.