- “Jobs report will probably be one of the worst ever” on Friday, St. Louis Federal Reserve President James Bullard said during a Wednesday interview with CNBC.
- While alarming, it’s expected because “you’re using the unemployment insurance program to provide pandemic relief,” Bullard said.
- Bullard expects the worst economic fallout in the second quarter, but said he thinks the US should return to growth quickly and be “finishing up this process” by the end of the year.
- Visit Business Insider’s homepage for more stories.
It’s likely that the government’s April jobs report due Friday will be one of the worst in history, St. Louis Federal Reserve President James Bullard said during a Wednesday interview with CNBC.
“Jobs report will probably be one of the worst ever,” Bullard said. “But that’s kind of expected because you’re using the unemployment insurance program to provide pandemic relief.”
Bullard’s comments came just as the Wednesday ADP report showed that US companies lost 20.2 million jobs in April, slightly below the consensus estimate of 20.6 million payrolls erased. The report is a harbinger for the Friday April jobs report due from the government.
Friday’s report could show a huge spike in the unemployment rate, which jumped to 4.4% in March from a record-low 3.5% in February.
“The unemployment rate is going to be extremely high,” Bullard told CNBC. “We think 20% isn’t unlikely, could even be higher than that. You’ve also got this PPP program, which has encouraged firms to keep their workers on their payrolls even though they’re not doing that much business.”
Still, Bullard said that the situation is not surprising. “It’s a pandemic, it’s a shutdown situation,” he said, adding that it’s necessary to help the workers who have been asked to stay home.
Bullard has long been one of the more bullish voices in the Fed. He said he expects the worst of the economic fallout to take place in the second quarter.
He expects the third quarter to be a “transition quarter,” he said, but that the US will return relatively quickly to growth and by the end of the year will be “finishing up this process.” The unemployment rate, which is expected to jump above 10% in April, could fall back below double digits by the end of the year, Bullard said.
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