New York: US equities pulled back in the week when various data showed the coronavirus already hurt the economy and the country continued to see a hefty number of confirmed COVID-19 cases.
For the week ending April 3, the Dow lost 2.7 per cent, the S&P 500 declined 2.1 per cent and the Nasdaq fell 1.7 per cent, reported Xinhua news agency.
Economic damage from the COVID-19 pandemic came into focus this week.
US employers cut 701,000 jobs in March, and the unemployment rate soared to 4.4 per cent, showing the first job decline in a decade, the US Bureau of Labor Statistics reported Friday.
“The changes in these measures reflect the effects of the coronavirus and efforts to contain it,” the bureau said.
Employment in leisure and hospitality fell by 459,000 in March, mainly in food services and drinking establishments, the report showed. Job losses also occurred in health care and social assistance, professional and business services, retail trade, and construction.
The unemployment rate surged by 0.9 percentage point to 4.4 per cent, which is the largest over-the-month increase in the rate since January 1975, the report noted.
The March jobs data came after a report showed a shocking number of Americans applied for unemployment benefits last week.
In the week ending March 28, US initial jobless claims hit 6,648,000, the Bureau of Labor Statistics reported Thursday. The figure easily topped the 3.3 million initial jobless claims announced a week earlier, which at that time was the largest number ever recorded.
The employment data and the jobless claims offered “early clues to the economic cost of a hard stop in the economy,” economists at FHN Financials said in a research note Friday.
Economic activity in the US manufacturing sector contracted in March amid the coronavirus fallout, the Institute for Supply Management (ISM) reported on Wednesday. The ISM manufacturing index slipped to 49.1 per cent in March from the February reading of 50.1 per cent.
The US Congressional Budget Office (CBO) estimated that GDP would decline by more than 7 per cent in the second quarter due to continued disruption of commerce amid the COVID-19 pandemic, according to a statement released Thursday.
If that happened, the decline in the annualized growth rate reported by the Bureau of Economic Analysis would be about four times larger and would exceed 28 percent, the CBO said.
As of Saturday afternoon, the United States has reported more than 290,000 COVID-19 cases with over 8,000 deaths, according to the data from Johns Hopkins University.
US President Donald Trump on Tuesday warned that the United States should prepare for “a very painful, very, very painful two weeks.”
Health experts with the White House Coronavirus Task Force said Tuesday that even with the Trump administration’s national social distancing guidelines in place, Americans still should be prepared for the prospect of the coronavirus causing 100,000 to 240,000 deaths in the country.