Goldman Sachs Group Inc. economists revised their forecasts to reflect a gloomier outlook for the U.S. labor market, though also the potential for a faster recovery from the coronavirus pandemic.

Analysts David Mericle and Ronnie Walker estimate that the unemployment rate will peak at 25%, up from a previous forecast of 15%, as “more workers will lose their jobs and a larger share of them will be classified as unemployed,” according to a research note late Tuesday. The rate would then remain near 10% at year-end, near the highs of the last recession, they wrote.

Goldman Sachs revised the figures following last week’s monthly jobs report showing a record contraction in payrolls in April and a 14.7% unemployment rate, the highest since the Great Depression era. A jobless rate of 25% would be in line with estimates of the peak during the Depression. (Bloomberg - Continue Reading)

German first-quarter growth is expected to show a sharp decline that will avoid the steeper drops in other Continental economies, but analysts fear any drop beyond current projections could increase the record contraction initially reported for the Eurozone.

Economists’ expectations show Germany’s seasonally adjusted first-quarter growth falling at a quarterly rate of 2.2pct following 0.0pct in the final three months of 2019. Non-adjusted annual growth in the first quarter is expected to drop 1.6pct versus an increase of 0.3pct in October-December, according to the survey.

An hour after German officials are set to release first-quarter data at a Berlin press conference, the European statistics office Eurostat is scheduled to publish its second euro-area growth estimates for the period. The numbers are expected to match the -3.8pct quarterly rate—the worst since the introduction of the euro in 1999—and the -3.3pct annual rate announced late last month. (LiveSquawk - Continue Reading)

Italy is trying to prop up its battered economy with a second stimulus package worth 55 billion euros ($60 billion). It may not be enough.

Prime Minister Giuseppe Conte’s government approved the much-delayed measures on Wednesday night in a bid to reduce the economic impact of the coronavirus pandemic. The plan focuses on liquidity for businesses and aid to families hurt by over two months of a nationwide lockdown. A 25 billion-euro package was passed in March.

The European Commission forecasts that Italy’s economy will shrink 9.5% this year while Bloomberg Economics sees a 13% contraction. With tax revenue collapsing and a desperate need for stimulus, the country’s mammoth debt will rise to well over 150% of gross domestic product, the Commission said. (Bloomberg - Continue Reading)

Australia saw record job losses last month as the government’s Covid-19 restriction measures shut down large parts of the economy.

Data from the Australian Statistic Bureau (ABS) released on Thursday showed employment falling by 594.3k in April. This was a slightly larger drop that the 575.0k economists had predicted.

The unemployment rate rose a full percentage point to 6.2pct from 5.2pct in March but would have been even higher were it not for a large number of people leaving the labour force.

“The large drop in employment did not translate into a similar sized rise in the number of unemployed people because around 489,800 people left the labour force”, said Bjorn Jarvis, head of labour statistics at the ABS. (LiveSquawk - Continue Reading)