US job bleeding begins

701,000 US jobs go

Consensus had expected that 100,000 jobs could go in March in last night's US figures, but in the end the figure was seven times that at -701,000. 

Thus the record run of 113 months of job gains was spectacularly brought to an end in March 2020.

Consensus was for an increase in the unemployment rate from the lowest levels since the 1960s to 3.8 per cent, but the spike was larger than expected here too, jumping to 4.4 per cent in March. 

For what it's worth, average hourly earnings increased +3.1 per cent over the year to March.

Early indications from the 10 million initial jobless claims suggest that the past decade of strong job gains could be quickly undone, while the US unemployment rate could spike to 20-30 per cent in the second quarter of 2020. 

Policymakers have nowhere to go but throw the kitchen sink and everything else at the economy, but the more pressing issue is the exponential growth in COVID-19 cases.

The US now has more than 275,000 cases, and the growth rate is still tracking at double digit levels, perhaps implying a further doubling over the coming week. 

Compare this to Australia with its 5,362 cases, high level of testing, and each of the most populous states having brought the growth in new known cases down to under 5 per cent (to date).

The Dow Jones closed down -2 per cent at around 21,000, down so far from above 29,400 in February.

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It's been an interesting few days for oil, with prices ripping about 50 per cent higher on the mooted OPEC deal and Saudi/Russian supply cuts.

Don't get me wrong I'm very optimistic for oil over the medium term, but it's hard to paint an optimistic picture in the short term given the massive drop in demand and glut of supply.