This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.
The number of U.S. workers filing for unemployment benefits is still historically high, but in recent weeks has dropped by about half from its late-March peak. The diminishing weekly totals suggest the wave of unemployment caused by the pandemic could crest as soon as this month. Still, the layoffs that already occurred are likely to cause the unemployment rate, at a 50-year low as recently as February, to jump to a record high with April’s number, due out Friday, Eric Morath and Gwynn Guilford report.
Perspective: Economists say it could still be many months before the labor market returns to a point when U.S. employers consistently add more jobs than they subtract. And it probably will take years for the economy to fully replace the millions of jobs lost in March and April.
WHAT TO WATCH TODAY
U.S. jobless claims are expected to fall to 3.05 million in the week ended May 2 from 3.839 million a week earlier. (8:30 a.m. ET)
U.S. productivity in the first quarter is expected to fall 5.5% from the prior quarter. (8:30 a.m. ET)
U.S. consumer credit for March is out at 3 p.m. ET.
Japan’s household spending report for March is out at 7:30 p.m. ET.
Federal Reserve: Atlanta’s Raphael Bostic speaks on the financial impact of the pandemic at 8:30 a.m. ET, Minneapolis’s Neel Kashkari speaks on Covid-19 and the North Dakota economy at 12 p.m. ET, and Philadelphia’s Patrick Harker speaks on the Fed’s response to the pandemic at 4 p.m. ET.
Note: This is a partial list of events and subject to change.
Time After Time
The April jobs report will be awful but also a bit of a look in the rearview mirror. As with more-current jobless claims, some private data suggest damage from the coronavirus response may be easing—if only a little. Employee scheduling, time clock and hiring software firm Homebase shows some small businesses are tentatively reopening. Even so, more than half of the companies that use the firm’s platform are still shuttered and more than half of their hourly employees aren’t working. “The clear takeaway from the data and research with our customers is that the economic recovery is going to be slow until consumers are willing to go out again,” said Ray Sandza, vice president of data and analytics at Homebase.
How else to track the economy? Raj Chetty, a co-founder of the nonpartisan data project Opportunity Insights, said he was struck by how policy makers had access to real-time data measuring the spread of Covid-19, but had “no comparable set of tools on the economic side.” Mr. Chetty and collaborators at Harvard and Brown universities tapped figures from eight sources—including credit card spending trackers, financial services firms, and job posting analytics companies—to create snapshots of local and nationwide economic trends that are as recent as three days prior. Mr. Chetty said the tracker shows that even in places with lower rates of infection the economy is still considerably affected, Janet Adamy reports.
President Trump said the White House coronavirus task force, first set up in late January as part of the effort to curb the pandemic, now would begin to focus on reopening the economy and developing a vaccine.
U.S. car companies are slashing capital spending and delaying some vehicle models to blunt the pandemic’s fallout, a sign of much leaner times ahead in Detroit after a long stretch of prosperity.
Airlines have grounded roughly three-quarters of their capacity, and it still hasn’t been enough. More than 90% of traffic has disappeared. The Middle Seat’s Scott McCartney looks at the complex schedules and hard choices airline dispatchers and operations executives must make during the pandemic.
Costco’s monthly sales fell for the first time since the recession as shoppers stayed at home.
As a meat-supply crunch hits grocery stores, expect higher prices for burgers and steaks, purchase limits and smaller selection. Here’s a WSJ guide to the meat shortage.
The Bank of England said it expects the U.K. economy to shrink by around 25% in the second quarter. The BOE said the outlook for the next few quarters is highly uncertain and its latest forecasts represent an illustration of what might happen based on available data so far rather than a firm prediction, Jason Douglas reports.
The European Commission is forecasting “a recession of historic proportions.” The eurozone economy is projected to contract 7.7% this year, while soaring national debts entrench economic divisions between countries.
Germany outlined the final steps toward restarting its economy, with schools, restaurants, bars, hotels and gyms able to open with new precautionary measures. Many of its factories never closed, offering a potential playbook for other nations. Strict safety rules, testing and contact tracing enabled plants to keep running without major outbreaks, Tom Fairless reports.
No immunity: German industrial production posted its largest monthly decline on record in March. Total industrial output—comprised of output in manufacturing, energy and construction—fell 9.2% in March from February, the federal statistics office said.
Remember Trade Tensions?
Chinese exports rose unexpectedly in April, bucking a pandemic-induced economic slump that has crimped demand and disrupted supply chains world-wide. But economists warned that Chinese exporters may be enjoying a temporary reprieve as the growth picture sours further in the U.S. and Europe, Jonathan Cheng reports.
U.S.-China relations are getting worse. The coronavirus crisis has deepened the bitterness between the two, with each government looking to outmaneuver the other to shape the post-pandemic world order, rather than cooperating, Kate O’Keeffe, Michael C. Bender and Chun Han Wong report.
China’s auto market rumbled back to growth. The country’s beleaguered auto market likely grew last month from a year earlier for the first time in nearly two years, the government-backed China Association of Automobile Manufacturers said Thursday.
“By early summer we can look forward to a return to normal in the country’s car market.” —Volkswagen China Chief Executive Stephan Wöllenstein
WHAT ELSE WE’RE READING
Where have the Paycheck Protection Program loans gone so far? “[S]ome of the hardest hit areas—such as New York, New Jersey, Michigan, and Pennsylvania—are getting fewer loans than some Mountain and Midwest states on a per-small-business basis. In New York, the epicenter of the coronavirus in the United States, less than 20% of small businesses have been approved to receive PPP loans. In contrast, more than 55% of small businesses in Nebraska are expecting PPP funding,” the New York Fed’s Haoyang Liu and Desi Volker write at Liberty Street Economics.
SIGN UP FOR OUR CALENDAR
Real Time Economics has launched a downloadable calendar with concise previews forecasts and analysis of major U.S. data releases. To add to your calendar please click here.