The longest economic expansion on record, a 113-month streak that netted 22 million jobs between October 2010 and February 2020, is over. The economy shed 701,000 jobs in March and the number of unemployed persons grew by 1.4 million in the first indications of the coronavirus emergency on the economy, with far worse expected in months ahead. The numbers the Labor Department released this morning are based on surveys that reflect only a few days of the virus’ effects on employers in March.
Job losses to be reported next month are expected to be in the millions, with initial unemployment claims just in the last two weeks reaching 10 million–before stay-in-place orders spread to most of the nation, including Florida. The March job loss was not far from the worst monthly job losses of the Great Recession, when the worst month recorded a loss of 800,000 jobs, in March 2009.
The unemployment rate had bottomed out at 3.5 percent. It rose to 4.4 percent in March, the largest month-over-the-month spike since January 1975, when it also rose 0.9 percent. The steepest month-over-month increase since World War II was in October 1949, when the unemployment rate rose from 6.6 percent to 7.9 percent. The spike was short-lived: the rate fell quickly after that, falling to historic lows.
The largest lost in March, of 459,000 jobs, was in leisure and hospitality–restaurants, bars and tourism-related businesses. The loss offset almost equal gains in the industry going back 24 months. Education and health services lost 76,000 jobs, with even health care jobs dropping by 43,000, including 17,000 in dentists’ offices and 12,000 in physicians’ offices. Professional and business services saw a loss of 52,000, retail lost 46,000 jobs, construction lost 29,000, and manufacturing, which had been a weak sector for a long time, lost another 18,000 jobs. There was one bright spot: federal government employment rose 18,000, reflecting the addition of census workers.
The losses are severe in states like Florida, where employment is heavily dependent on services and hospitality.
“Everything was shut down literally overnight,” Florida House Rep. Paul Renner, who represents Flagler County, said this morning on WNZF. “There’s a lot we don’t know yet because these things are lagging.” He suggested that the Legislature may have to “come back and make adjustments to the budget” if the federal stimulus packages don’t fill the holes sufficiently.
Michael Gapen, chief U.S. economist at Barclays, told The New York Times the unemployment rate could rise to 13 percent when April numbers are tabulated. “What is so startling is how quickly things are deteriorating,” he told the paper. “As bad as this report is, next month will be many orders of magnitude worse. This is the initial slippage of the labor market.”