United States employment plunges in March amid coronavirus damage

Daniel Fowler
April 5, 2020

It's likely the jobs report for the current month will be worse.

As the COVID-19 pandemic continues to ripple across the country, experts believe that the labour market is going to see double-digit unemployment rate shortly, with tens of millions of Americans losing their jobs. "Unemployment will soar into the double digits, while participation plummets", Swonk said.

Diane Swonk, chief economist at Grant Thornton, a major accounting firm, wrote in a blog that "the drop in payrolls in March was unprecedented for the start of a recession and will get more than 20 times worse in April". Because the relevant surveys occurred in the first half of March, and numerous job losses happened in the second half, the expectation was that the figures might paint an overly rosy picture.

Moreover, the monthly employment data understates the true scale of the carnage roiling the United States labour market because the government surveyed businesses and households in the middle of March, when many parts of the nation were not yet under lockdown and many businesses and schools had not yet closed.

But the harm was widespread and notable losses also were recorded in healthcare, retail and business services.

According to a USA Today report, that's because Labor's survey was conducted the week ending March 14, before most states ordered residents to stay at home and nonessential businesses - such as restaurants, movie theaters and most stores - to close.

Trump said he wants another package that would provide $2 trillion for infrastructure.

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"This is the largest over-the-month increase in the rate since January 1975, when the increase was also 0.9 percentage point".

The two surveys that make up the closely-watched monthly government jobs report are taken during the week that includes the 12th of the month, which in March was before the most restrictive of the lockdowns were imposed that closed businesses nationwide.

As a result, the data for March "predated many coronavirus-related business and school closures that occurred in the second half of the month", it explained. The Labor Department wrote that the decrease in employment and hours worked versus the increase in unemployment can be attributed to effects of the coronavirus and efforts to contain its spread.

The crisis means the decade-long employment gains came to a screeching halt.

The question isn't whether that jobless rate will keep climbing, but how high it will go.

And the pain was felt across all groups, with unemployment for adult men and women each rising to 4.0 percent, while the jobless rate for African Americans jumped to 6.7 percent from 5.8 percent.

The impact on Hispanics was even worse, surging to 6.0 percent from 4.4 percent in the prior month.

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