All because of the coronavirus: the number of jobs in the United States fell - for the first time in 11 years
The number of jobs in the United States in March 2020 was reduced by 701 thousand. The continuous growth of the labor market over the past ten years has stopped. And this is just the beginning of the storm caused by the coronavirus, which destroys the American economy and the labor market, writes USA Today.
The unemployment rate jumped from a 50-year low of 3,5% to 4,4% - the highest level since August 2017, the US Department of Labor said in a March report. This is the fastest rise in unemployment in a month since January 1975, according to TD Economics.
The report also cites employers in early March who raised concerns about the possible critical economic impact of the pandemic. And that was before nearly 10 million laid-off and unemployed Americans applied for unemployment benefits in the second half of March. The survey was conducted until March 14, before most states ordered the closure of non-essential businesses to support the country, such as restaurants, movie theaters, and most stores, leading to layoffs and rising unemployment.
“This is terrible, but unfortunately it is nothing compared to what is expected in April,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
The 701 job cuts were the highest since March 000, when 2009 people lost their jobs in a month, when the Great Recession began. After the end of this economic crisis, the US labor market grew steadily; job cuts in March 800 cut off the record 000-month growth series that began in October 2020.
After the government announced large job losses on Friday, April 3, US stocks plunged. The decline in the market was also pushed by the decline in oil prices. The Dow Jones Industrial Average fell about 500 points, while the Standard & Poor's 500 fell 2,2% in early trading on Friday afternoon.
The Friday report does reflect a sharp decline in the economy. The average weekly number of applications for unemployment benefits increased by 70 thousand (this is the highest figure since 2013). In total, over the past week such applications have accumulated 282 thousand. In total, the number of unemployed last month rose by 1,4 million.
Oxford Economics estimates that an outbreak of coronavirus will result in a loss of 24 million US jobs and an increase in unemployment to 14% in April alone. This is 10% higher than the peak achieved during the Great Recession of 2007-2009. Further job cuts should bring unemployment to a peak of 16% in May, economist Gregory Daco said.
In comparison, during the Great Recession, the US economy lost nearly nine million jobs, but this happened within two years, not several months.
Shamike Brown, 34, from Conway, South Carolina, lost her dream job just three weeks after taking office. She worked as a specialist dealing with developmental delays in children. Parents simply stopped letting such specialists into their homes. And since she was a newly hired employee, they fired her one of the first.
“Everyone was so proud of me and now I have nothing to say,” says Brown.
A single mother of two children applied for unemployment benefits, but received a message that she would not receive it due to a technical error that she made when filling out the forms. Her numerous calls to the state employment service remained unanswered.
“I'm worried about how I'm going to pay my bills and get food,” says Brown. "I have children at home, and I try not to let them see that I am worried or worried about anything."
Most analysts say the US economy is already mired in a deep, but probably short recession. Capital Economics predicts that gross domestic product in the second quarter will fall by a staggering 40% in annual terms.
Assuming that by the summer the outbreak of the coronavirus will begin to weaken, economists expect strong economic growth in the second half of the year, when closed enterprises reopen. Meanwhile, Congress’s decision to provide $ 2,2 trillion in quarantine assistance to victims of the quarantine will provide an incentive for many small businesses to retain old or hire new employees.
However, layoffs and consumer fear of infection can lead to a collapse of the economy over time.
Branches in which jobs are being cut
As expected, the recreational and hospitality sectors were the hardest hit, with 459 people losing their jobs in the industry, although this number only reflects the initial spike in redundancies in these sectors. Healthcare lost 000 jobs; the sphere of professional and business services - 61; retail trade - 000; construction - 52; production - 000.
The numbers show the breadth of the impact of the pandemic on the economy. Even auto and other manufacturers have closed factories because of fears of infection. Law and marketing firms are cutting jobs, even though their employees can work from home, as most of the economy remains paralyzed by uncertainty.
The government, on the contrary, was able to create new jobs. These are 12 jobs, but mostly they are temporary workers for the 000 census.
An unemployment rate of 4,4% emphasizes only part of the economic disruption caused by the outbreak of cornavirus. The number of part-time Americans, even if they want to work full time, as well as the number of people who wanted to find work but refused to do so, jumped from 7% (a 20-year low) to 8,7%. This is the highest level since March 2017.
The proportion of Americans working or seeking work has fallen from a seven-year high of 63,4% to 62,7%. This is the lowest level since the end of 2017. It also shows that the official unemployment rate does not cover all workers who have experienced the effects of the pandemic.
Wages are rising
Average hourly wages rose 11 cents to $ 28,62.
According to economists, many of those who lost their jobs last month were low-paid employees in restaurants and retailers, and this could lead to a significant increase in the average wage among the working population.
Last year, annual wage growth was around 3%, despite a decline in unemployment. Now, as a result of the recession, too many people have lost their jobs, which is likely to lead to a decrease in the total annual rate of growth in wages. Wage growth, economists estimate, will slow sharply over the next few months.
As reported by ForumDaily:
- Senate approved unprecedented economic crisis relief package $ 2,2 trillion, which will go to businesses, workers and healthcare systems affected by the coronavirus pandemic.
- The bill was unanimously supported, despite the fears of representatives of both parties that the proposed measures are too large or, conversely, not large enough.
- For information on who is eligible for federal assistance, and when this money will be paid, read here.
- If you have become one of those who have lost their jobs, then all the details of the process for applying for unemployment benefits can be found link.
Read also on ForumDaily:
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