Even with unemployment rates starting to rival those during the Great Depression, Wall Street keeps slogging ahead, hoping for that light at the end of the tunnel.
MANHATTAN (CN) — Markets inched forward Friday morning despite terrible a jobs report, as investors are betting things will improve soon.
The Dow Jones Industrial Average gained more than 300 points at the morning bell, a 1.3% gain, while the S&P 500 and Nasdaq had slightly lesser increases.
Earlier this week investors already sifted through a historically bad ADP unemployment report, as well as the Labor Department reporting an additional 3.1 million new unemployment claims filed the week ending May 2.
The Bureau of Labor Statistics’ jobs report on Friday expectedly showed a plunge in employment, with 20.5 million non-farm jobs lost in April. The unemployment rate as of last month was 14.7%.
In February, before the coronavirus took hold in the United States, the unemployment rate was at 3.5%. Unemployment during the peak of the Great Recession was just under 10%. During the Great Depression, unemployment rose as high at 24.9% in 1933 before it slowly crept back down after the New Deal was passed.
The official numbers are as bad as any seen since the Great Depression, but true joblessness may in fact be much worse. On Thursday, Minneapolis Federal Reserve bank Chair Neel Kashkari told NBC the jobs report will not paint a fulsome picture of joblessness in the United States.
“That bad report tomorrow is actually going to understate how bad the damage has been,” Kashkari said. “I think the [unemployment] number tomorrow will probably be something like 16% or 17%. I think the real number is probably around 23% or 24%. It’s devastating.”
Unemployment numbers in the Friday report represent only those employees who are actively looking for a job. Taking into account those employees who were forced into part-time jobs and others marginally attached to the labor force, the unemployment rate goes from 14.7% to 22.8%.
Employees who reported being on “temporary layoff” rose to 18.1 million of that number, and about 14.2 million of the 21 million reported being unemployed for less than five weeks as of the end of April.
After the jobs report was released, President Trump commented Friday morning on Fox that the numbers were “totally expected, there’s no surprise.”
“Those jobs will be back,” he added.
Markets abroad has been focused on other things, though, including various countries starting to reopen and the increasingly rocky relationship between the United States and China over trade.
Asian markets, most of which were closed for a good portion of the week due to holidays, rallied on Friday. Japan’s Nikkei led the way, closing 2.5% up, while markets in China, Australia and South Korea all enjoyed gains of up to 1%.
Europe also seems ready to finish the week on a positive note. As of 9 a.m. EST, most markets hovered around a 1% increase for the day.
A few more earnings reports have come trickling in, showing only glimmers of hope.
Pharmaceutical company Bristol Myers Squibb reported a strong first quarter of 2020, with $10.8 billion in revenues — an 82% increase year over year from the $5.9 billion in Q1 2019. The company also showed a huge increase in net earnings, with $4.7 billion in Q1 2020 versus $94 million during Q1 2019.
A day after Lyft posted its earnings, ride-hail competitor Uber reported a 14% year-over-year increase in revenue, from $3 billion in Q1 2019 to $3.5 billion in Q1 2020. The company’s gross bookings increased 8%, despite the lockdowns that began in mid-March.
“While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario,” CEO Dara Khosrowshahi said in a statement.
“Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up,” Khosrowshahi said.
More than 3.8 million people worldwide have been confirmed infected by Covid-19, according to data from researchers at Johns Hopkins University, and 272,000 have died. In the United States, more than 1.2 million people have contracted the novel coronavirus and 75,000 have died.