This Could Be the Worst Non-Farm Payroll Report Ever

By: Kathy Lien - Investing.com

Tomorrow’s U.S.non-farm payrolls reportis expected to be the worst ever. Economists believe that more than 21 million jobs were lost in the month of April, which would drive the unemployment rate up to 16%. The last time the jobless rate was in the double digits was in 1983, just after the 1980s recession. Historic job losses should drive currencies and equities lower, but with everyone looking for an ugly report, how much impact will it really have on the markets?

Keep an eye on average hourly earnings because that’s where the big surprise could be. Economists expect earnings growth to hold steady at 0.4% and rise from 3.1% to 3.3% year over year. This is difficult to fathom considering widespread reports of companies keeping employees on payroll but cutting salaries. If wage growth turns negative and the rest of the jobs report is in line, it could be enough to send equities and currencies sharply lower.