How many days or weeks has it been since you were last at work? How much longer will it be until you can get back to your job, earn a living, and keep yourself busy? Can you really spend another couple of weeks watching every season of Desperate Housewives on Amazon Prime or Netflix? By now, it is obvious that the U.S. economy is in a deep recession. If you needed any more convincing of just how bad the labor market is, the federal government published more jobs data – and it was not pretty.
Initial Jobless Claims
According to the Department of Labor, initial jobless claims came in at 6.606 million in the week ending April 3. Analysts had anticipated a reading of 5.25 million. Continuing jobless claims soared 7.455 million. The four-week average, which removes the week-to-week volatility, was 4.265.50 million.
Last week, jobless claims came in at a record high 6.648 million, continuing jobless claims surged to 2.612 million, and the four-week moving average spiked to 2.612 million.
In total, more than 18 million Americans have filed for unemployment benefits in three weeks. Will next week be any better? For everyone going stir crazy, it needs to be!
Other Employment Data
The March unemployment rate shot up from its 50-year low of 3.5% in February to 4.4% in March. Experts surveyed forecast that the jobless figure may surge to the low teens in April because as many as 20 million Americans could appear in the monthly labor report as lost jobs. The consensus on The Street is that the unemployment rate will soon top 32% since approximately 50 million positions are at risk of being eliminated due to the Coronavirus.
Every sector has been impacted, and most will continue to be affected during the lockdown. Interestingly, the area of the labor market that has been devastated the most is bars and restaurants. They accounted for 60% of the lost jobs in March.
The economic misery is not created equal across the U.S., with some states are going through worse than others. Minnesota and New Hampshire have reported declines in unemployment benefit applications, while California and New York have seen massive spikes in claims.
The Golden State has been successful in mitigating the outbreak, but its economy, which is bigger than those of many countries, has taken a steep hit. Since March 12, more than 2.4 million people have filed for unemployment in California. The state government established a job-search website to address its jobless workforce, and Governor Gavin Newsom is recommending workers to be proactive when applying for new jobs. California recently confirmed more than 1,100 patients are in intensive care units, nearly 3,000 have been hospitalized, and dozens passed away in 24 hours.
Meanwhile, a recent DoL study found that job openings tumbled to 6.9 million in February, down from seven million in the previous month. Manufacturing and retail led the way, but there was very little change in other industries. Last month, 5.9 million people were hired and 5.56 million were laid off, fired, retired, or died. The March data will barely show any increases in hiring, and layoffs could more than triple February’s figures as many companies – large and small – terminated or furloughed staff.
A separate ADP study discovered that companies shed 27,000 jobs before the Coronapocalypse. The payroll processer said that small businesses took the biggest hit, but medium-sized and large companies continued to add workers before America hit the pause button.
Perhaps next week will see some better data released to the public. Americans have earned it by now!
Hope for the Best, Prepare for the Worst
The deeper the economy goes into April without any sign of a reprieve, the higher and more permanent the broad-based layoffs will be. A lot of employers have mostly targeted hourly workers so far, but they could soon home in on salaried staff. The White House has hinted that it is thinking about gradually reopening the economy in the next four to eight weeks, but everything is uncertain as officials hope for the best and prepare for the worst. We can pray that people have jobs to return to after the lockdown.
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Read more from Andrew Moran.
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