Some hope for the recovery in the dismal jobs report: 78% of workers say their layoff is temporary

Some hope for the recovery in the dismal jobs report: 78% of workers say their layoff is temporary

Luis Mora stands in front of the closed offices of the New York State Department of Labor on May 7, 2020 in Brooklyn, New York City.

Stephanie Keith | Getty Images

The economy lost a record 20.6 million jobs in April, but 78.3% of those worker see their layoffs as temporary.

The number of employees who saw themselves as temporarily furloughed was 18.06 million, up from 1.84 million in March.

“It’s high in a good way. The market could be reacting to that. If you see them move to permanent that’s a problem,” said John Briggs, head of strategy at  NatWest. 

Stocks opened higher on Friday, even after the dismal jobs report.

Michelle Meyer, Bank of America head of U.S. economics, called the high number of temporary layoffs a “silver lining” in a bleak report.

“With 78% classified as temporarily unemployed, workers should be able to be more seamlessly rehired upon reopening. But time is of the essence,” she wrote in a note. 

The unemployment rate surged to 14.7%  in April.  Those who say they are temporarily furloughed expect to be back to work within six months – a potentially good sign for the economy.

“Over the last 50 years, the three recessions with the highest share of temporary layoffs were followed by the fastest labor market recoveries,” wrote Goldman Sachs economists.

Treasury yields, which move opposite price, were slightly higher after the report.

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