Here’s how the March jobs report will unlikely show the full impact of COVID-19

Yahoo Finance’s On The Move panel break down how the March employment report will unlikely show the full impact of the coronavirus crisis.

Video Transcript

- As we've already gotten some economic data already this week, pending home sales did not include what obviously will be a slowdown because of the coronavirus crisis, but there's going to be more economic data. And to discuss this, we want to bring in Brian Cheung, because we're going to get those unemployment numbers on Friday. But even though they look backward, they're not going to capture the totality of the crisis, will they?

BRIAN CHEUNG: They're not. And to get a little wonky about the data, so the jobs report that will come out on Friday is actually going to cover the month of March, but it will capture it as of March 12th. So it will be as of the second week of March, when the BLS was surveying Americans around the country and saying are you employed, are you looking for jobs right now, what does it look like. And as we know, the beginning of March was not really the full onset of the coronavirus-related shutdowns. That's really happened at the end of the month.

So while this jobs report may capture a lot of those layoffs, we won't see that effect of the unemployment claims that was a remarkably large number as of last week. We really won't see the full effect of that until the April jobs report, which will now come out the first week of May. So we'll get a little bit of a preview in that jobs report. But at the end of the day, we know that the data is really going to guide the market movements from here, right?

This is kind of the first time that we have this jobs report data coming in as a result of the coronavirus effects here, and really wondering how are markets going to react to that. You had Deutsche Bank earlier this morning saying going forward now, the bad news will come from the real-time data and earnings reports that could, in some cases, create existential risk. So market managers really paying attention to this data as it does come out on Friday.

- Hey, Brian, I have a question for you, as well, about another piece of data that came out this morning, the Dallas Federal Reserve Manufacturing Index, which registered a negative 70, 7-0, in March. It was up 1.2, or showed a positive 1.2 reading in February. Normally, we don't pay attention-- that much attention to these regional manufacturing surveys, right? But I would imagine it has more importance now. Does it tell us what national manufacturing is looking like right now?

BRIAN CHEUNG: Absolutely. And one thing that's kind of alarming about the Dallas Fed report is that it shows that a lot of businesses don't think we've reached the bottom, if you will, with regards to manufacturing. So one example is food manufacturing. So the Dallas Fed survey actually said they're operating at a high level for right now. We've seen that in a lot of grocery stores around the country.

There haven't been too many issues with some types of products, although obviously bread, eggs, things like that have been strained. But the Dallas Fed survey said that a lot of these manufacturers said they expect interruptions soon, which means you do wonder for the restaurants that have managed to stay open for this long, whether or not their days are numbered, as well, because the food manufacturing supply chain could be the next to go.

Keep in mind, that is only covering the Dallas district down in the south, but other districts are reporting something similar. The New York Fed, for example, had a survey that they released this morning that said 40% of service firms were already laying off staff. That's actually done a week ago. So you do wonder about whether or not, in the current week, there is even a larger magnitude of people being laid off. 30% of manufacturers in the New York region have also cut staff. So this is a cascading effect that you'll start to see from other regions around the country, as well.