The U.S. economy hit a historic unemployment record of 20.5 million jobs in April, the sharpest fall in payrolls since the Great Depression.
This historic unemployment record is the most tangible sign of how the novel coronavirus pandemic is battering the world’s biggest economy.
The Labor Department’s closely watched monthly employment report on Friday also showed the unemployment rate surging to 14.7% last month. This shattered the post-World War Two record of 10.8% touched in November 1982.
Data for March was revised to show 870,000 jobs lost instead of 701,000 as previously reported. A record streak of job growth dating to October 2010 ended in March. The unemployment was forecast rising to 16% from 4.4% in April.
The bleak numbers strengthen analysts’ expectations of a slow recovery from the recession caused by the pandemic.
Things are much the same in Europe. The Bank of England predicts the UK economy is heading for its worst crash in 300 years. And the EU’s economy could shrink by 7.5%, a steeper decline than during the 2008 financial crisis.
On the trade war front, top U.S. and Chinese trade representatives discussed their Phase 1 trade deal on Friday. China said they agreed to improve the atmosphere for its implementation while the United States said both sides expected obligations to be met.
START TRADINGForex – Historic unemployment rate for the US
Signs of improving Sino-American relations boosted risk appetite and calmed investors’ fears about renewed trade tensions. Currencies linked to global trade rose on Friday. A public holiday in Britain means liquidity will be thin as London markets are closed.
The dollar gained after April U.S. non-farm payrolls report. The greenback extended gains against the yen and turned higher versus the euro on Friday.
The US dollar rose 0.3% against the yen to 106.515 yen, while the euro slipped against the dollar to $1.0832.
The Australian dollarrose 0.3% to $0.6514 after earlier hitting a one-week high.
The euro recovered earlier losses and was 0.1% higher at $1.0839, moving away from Thursday’s near two- week low of $1.07665.
The euro is down more than 1% on the week.
Sterling edged higher in thin trading, with Britain on a public holiday to commemorate the 75th anniversary of the end of WWII on the European continent. Further, the pound rose 0.1% to $1.2376.
Oil prices climbed as some countries moved ahead with plans to relax economic and social lockdowns imposed to halt the coronavirus pandemic.
Brent crude was up 58 cents, or 1.97%, at $30.04 a barrel. U.S. oil gained 58 cents, or 2.5%, to $24.13 a barrel.
Gold remained near a two-week high reached in the previous session as investors awaited the U.S. jobs report. Spot gold held just below the highest since April 27.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money