The number of jobs in the U.S. in March 2020 declined by 701 thousand. The continuous growth of the labour market observed over the last ten years has stopped. And this is only the beginning caused by a coronavirus storm that destroys the American economy and the labour market, writes USA Today.
The unemployment rate jumped from 50-year low of 3.5% to 4.4% — the highest level since August of 2017, says the report of the U.S. Department of labor at the end of March. According to TD Economics, this is the fastest rise in unemployment for the month of January 1975.
The report also provides the results of a survey of employers in early March, which raised concerns over possible economic consequences of a pandemic. And that was before almost 10 million laid-off and unemployed Americans filed applications for unemployment benefits in the second half of March. The survey was conducted until March 14, before most States had ordered the closure irrelevant to the country’s businesses, such as restaurants, cinemas and shops, which led to massive layoffs and rising unemployment.
“It’s terrible, but unfortunately, it’s nothing compared to what is expected in April,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
The reduction in the number of jobs at 701 000 was the highest since March 2009, when for the month the work lost 800 000 men, then the reason was the beginning of the great recession. After this economic crisis, the US labor market is continuously growing, the reduction in the number of jobs in March 2020 broke a record 113-month sequence of expansion that began in October 2010.
After Friday, April 3, the government announced large job losses, US stocks collapsed. The fall market also prompted a decline in oil prices. Industrial Dow Jones has fallen by about 500 points, while the index Standard&Poor’s 500 fell 2.2% in early trading in the second half of the day on Friday.
Friday’s report does reflect a sharp decline in the economy. The average weekly number of applications for unemployment benefits rose by 70 thousand (this is the highest indicator in 2013). In the past week such applications had 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 the loss of 24 million jobs in the U.S. and rising unemployment to 14% in April. This is 10% above the peak reached during the great recession of 2007-2009. A further reduction of jobs to bring the unemployment rate to peak at 16% in may, says economist Gregory Daco.
For comparison, during the great recession, the U.S. economy lost nearly nine million jobs, but it happened for two years, not several months.
34-year-old Shamika brown of Conway, South Carolina, lost his dream job just three weeks after this post. She worked as a specialist dealing with developmental delays in children. Parents just stopped to let such specialists in house. And since she was recently hired employee, then fired her on the first one.
“Everyone was so proud of me, and now I have nothing to tell,” says brown.
Single mother of two children filed for unemployment, but got the message that it will not get it due to a technical error that she made when filling out forms. Her numerous calls to the employment service of the state went unanswered.
“I’m worried about how I will pay my bills and put food on the table, says brown. — At home I have children, and I try not to let them see that I care or worry about anything”.
Most analysts say the U.S. economy is already mired in a deep, but short recession. Capital Economics predicts that gross domestic product in the second quarter decreased by a staggering 40% in the annual equivalent.
Assuming that the summer outbreak of coronavirus begins to wane, economists expect strong economic growth in the second half of the year, when private enterprise will re-open. Meanwhile, Congress adopted the decision on Federal assistance to the victims due to quarantine in the amount of $ 2.2 trillion will give an incentive to many small businesses, so they can retain or hire new employees.
However, mass layoffs and the fear of consumers before the infection can for some time to bring the downfall of the economy.
Industries in which jobs have been
As expected, the most affected recreationa sphere and hotel business: 459 000 people lost their jobs in the industry, although this number reflects only the initial burst of contractions that swept these areas. Health lost 61 000 jobs; the professional and business services — 52 000; retail trade — 46 000; construction — 29 000; production — 18 000.
The figures 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. Legal and marketing firms are cutting jobs, despite the fact that their employees can work from home, since a large part of the economy remains paralyzed by uncertainty.
On the contrary, the government could create new jobs. This 12 000 jobs, but mostly temporary workers for census 2020.
The unemployment rate
The unemployment rate is 4.4% emphasizes only part of the economic devastation caused by the outbreak of coronavirus. The number of Americans working part time, even if they want to work full-time, and the number of people who wanted to look for work, but refused to do so in the current situation, jumped from 7% (20 year minimum) to 8.7%. This is the highest level since March of 2017.
The share of Americans working or looking for work, fell from a seven-year high at 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 experienced the consequences of the pandemic.
Wages are rising
Average hourly wages were up 11 cents to $28,62.
According to economists, many of who lost their jobs last month were low wage earners restaurants and retailers, and this could lead to a significant increase in the level of average wages among the working population.
Last year, annual wage growth was about 3%, despite the decline in the unemployment rate. Now as a result of the recession too many people have lost their jobs, that probably will reduce the annual growth rate of remuneration. Wage growth, economists estimate, will slow sharply over the next few months.
As reported ForumDaily:
The Senate approved an unprecedented package of economic assistance of $2.2 trillion, which will go to business, workers and systems of health affected by the pandemic coronavirus.
The bill was supported unanimously, despite concerns of representatives of both parties, that the measures proposed were too ambitious or, on the contrary, not ambitious enough.
Information about who is eligible for Federal assistance, and, when the money to pay, read here.
If you are one of those who lost his job, all the details of the process of applying for unemployment benefits can be found at the link.
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