Last week’s jobs report was not so much about how the economy is doing. We know the economy was doing moderately well coming into the month of March. It is during the month of March that things changed rapidly. Witness the weekly jobless claims reported late in March and early April at a record 5.0 million per week average. Just to give a perspective, the previous records were during the financial crisis and the early 1980's recession. Those came in between 650,000 and 700,000 for the week. This is a measure of how quickly employment will be affected.
The unemployment rate of 4.4% and millions of job losses are headline numbers, but we are not likely to see the real story until next month. Next month's data will not only include a full month of this effect, but also a revision of March's numbers as well. This is why the Federal Reserve, Congress, and the Administration have stepped in so quickly. First the Fed acted to lower rates and then they acted to purchase bonds and mortgage securities.
Then we followed with the approval of a massive stimulus bill to the tune of almost 2 trillion dollars. That is a lot of stimulus. The stock market rallied on the news of the bill, but we must remember that it will not cause the economy to turnaround overnight. The downturn will start in a sharp "V" shape, but the recovery is not likely to be as sharp. Low rates will help. Stimulus checks will help. Getting rid of the threat of the coronavirus will help even more. Don't be surprised if more stimulus measures are needed before this is over.