Despite a few hiccups and a couple of causes for concern, the U.S. labor market has been the most resilient and robust in the global economy since the end of the Great Recession. Back then, the world contended with a housing bubble that killed millions of jobs. Today it’s Coronavirus, an invisible enemy emanating from the wet markets of China, that’s producing the financial crisis that has shuttered businesses, left millions of Americans jobless, and kept the national economy teetering on the brink of collapse. How bad is America’s employment situation right now? Better yet, how much worse can it get?
March Unemployment Rate
According to the Bureau of Labor Statistics (BLS), the U.S. economy lost 701,000 jobs in March, down from the 273,000 new jobs created in February. This is the first employment contraction since 2010.
The unemployment rate surged to 4.4%, up from the 50-year low 3.5% reading in the previous month. Analysts had forecast 100,000 lost jobs and an unemployment rate of 3.8%, but the surveys were conducted before a lot of states ordered residents to stay home.
The leisure and hospitality industry led the decline with 459,000. Other notable decreases were felt in health care, retail, construction, and business services. Manufacturing payrolls shed 18,000, while government payrolls added 12,000. Average hourly earnings rose 0.4%, average weekly hours dipped to 34.2, and the labor force participation rate dropped to 62.7%.
Experts are sounding the alarm that the April jobs data may be more severe because many jurisdictions implemented their stay-at-home orders in late March. America could witness a double-digit jobless figure this spring, in addition to cratering gross domestic product – a double whammy.
In pre-market trading, the leading U.S. stock indexes were in the red: The Dow Jones Industrial Average shed 184 points, S&P 500 slipped 0.82%, and the Nasdaq Composite Index fell 1.09%. The benchmark ten-year Treasury note slumped to 0.59%.
Jobless in the Union
Wallet Hub, a personal finance website, released the results of a study that assessed the hardest-hit states. It used the initial jobless claims data from the Department of Labor since March 21.
The places with the biggest unemployment increases were Louisiana, North Carolina, Indiana, New Hampshire, and Florida. States with the smallest jobless spikes were Oregon, Connecticut, Wisconsin, Wyoming, and West Virginia. For those who need to make this a left-right issue, the red states are faring better than the blue ones.
“With an average unemployment rank of 25, Blue States suffered a higher increase of their unemployment during the coronavirus outbreak than the Red States, which rank 27 on average,” said Jill Gonzalez, WalletHub analyst, in a statement. “The lower the rank, the higher the increase in initial unemployment claims that state received during the coronavirus pandemic.”
Recession or Depression
In the last two weeks, more than ten million unemployed Americans have filed for unemployment benefits. You can anticipate millions more as the Coronavirus plagues the private sector, and the economic fallout persists. The government is trying to cushion the blow with deficit-financed stimulus checks, or as Liberty Nation’s Graham Noble prefers to call them, refunds. But the long-term ramifications of COVID-19 will be more pronounced in every facet of the economy, from jobs to consumption to output. It will be years until the U.S. recovers. By then, the nation will need to compete with another recession – or depression. Our heartburn will be unable to handle the agony by then!
Read more from Andrew Moran.
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