April Jobs Report Shows Bulk of Losses in Front-Line Sectors

Nareit Senior Economist Calvin Schnure said that while the April jobs report was “clearly a shock to the economy,” the bulk of job losses were confined to a few sectors facing complete shutdowns.

In the May 11 edition of the REIT Report, Schnure noted that the April report showed a record decline in employment while the unemployment rate jumped to 14.7%, the highest level since the Great Depression. However, the data are “less alarming than we might have expected,“ Schnure said. He noted that 60% of the job losses were in sectors such as restaurants, doctors’ offices, and retail—which may be in a position to rehire at a later date.

Schnure added that the data indicate that the losses do not appear to be spilling over into other sectors at this time. In addition, more than 80% of those losing their jobs said they expect the situation to be temporary.

“That suggests that we will get a recovery when the health situation clears up,” Schnure said.

Looking ahead, Schnure said investors will continue to look for information on May rent collection. A preliminary report from the National Multifamily Housing Council shows 80% of households making a full or partial rent payment in the month.

April retail sales and industrial production figures will also be released this week, Schnure said. He noted that the March reports didn’t reflect the full impact of the shutdown.