Unemployment Rate Forecast

Economic Forecasts

A Silver Lining Among Record Job Loss

Kiplinger’s latest forecast on jobs

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GDP -5.8% growth in 2020, down from 2.3% in 2019 More »
Jobs States are reopening, but workers will come back slowly More »
Interest rates 10-year T-notes staying below 1.0% for a while More »
Inflation 0.3% by the end of '20, from 2.3% at end '19 More »
Business spending Down 10% to 20% in '20 More »
Energy Crude oil trading from $35 to $40 per barrel in coming weeks More »
Housing Total starts down 2.0% in '20 More »
Retail sales E-commerce surge will last More »
Trade deficit Widening 3% in ’20 More »

While employment fell by a record 20.5 million in April, 18 million of those lost jobs were classified as temporary layoffs, providing a small silver lining. States are beginning to reopen their economies, and we should see some workers headed back to work. However, even those businesses that are reopening are likely to do so at less than full speed, and so the number of unemployed is likely to stay high for some time.

Sectors that lost over half their employees included food service, amusements, personal services, dentists, movie production, sports, retail clothing and furniture. Sectors losing a third of their workers included airlines, daycare and temporary workers. Many states are allowing health care offices to reopen, plus retail and restaurants at low capacity. Job numbers should rise in May, but will likely remain low, especially in sectors that require mass gatherings.

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The unemployment rate rose to 14.7%, but the Bureau of Labor Statistics suggested the true rate was higher. Its statisticians think that the high number of employed workers reported as absent should have been classified as on temporary layoff. After adjustment, the rate would be 19.5%. Another 3% of workers simply dropped out of the labor force because they couldn’t look for a job. Finally, still another 3% went from full-time to part-time because of cuts in hours worked.

April saw a big jump in wages, but that was a statistical fluke. So many low-paid workers were laid off that it caused the average wage rate to jump.