WASHINGTON: US employment plummeted last month in the first decline since 2010, offering an initial look at the widespread devastation the coronavirus pandemic has already begun to wreak on the once-strong labour market.
Payrolls in March fell 701,000 from February — compared with the median forecast of economists for a decline of 100,000 — according to Labor Department data Friday that mainly covered the early part of the month, before government-mandated shutdowns forced businesses to lay off millions more workers.
The jobless rate jumped to 4.4% — the highest since 2017 — from a half-century low of 3.5%, and is expected to surge above 10% in the coming months.
The figures represent a dramatic shift from just a month earlier, when job gains topped 200,000 and employers were having so much difficulty finding qualified workers that they were hiring previously marginalised populations such as people with criminal records.
President Donald Trump has frequently touted strong employment figures as he runs for re-election this year.
But over the past month, Covid-19 has rapidly spread across the US, killing thousands and leading an increasing number of states to encourage or order their citizens to stay home. That, in turn, has led to widespread business closures and millions of layoffs in a range of sectors.
Because the reference period for the jobs report is based on the 12th of the month, the March data captured only a fraction of the joblessness across America. Nearly 10 million people have filed for unemployment benefits in the last two weeks alone.
Goldman Sachs sees the jobless rate reaching 15% by midyear, while the Federal Reserve Bank of St Louis said it might hit 30% in the second quarter.
“The abruptness with which the economy has taken this step down is so striking,” FS Investments chief US economist Lara Rhame said on Bloomberg Television. “It’s like a hurricane but hitting the entire country at the exact same time.”
Congress and the Trump administration are trying to help individuals and small businesses rocked by the economic shutdown, with a loan programme for small businesses getting off the the ground Friday and direct cheques en route to many households in coming weeks
But the programme that provides up to $350 billion in aid to small businesses, aimed at preventing further layoffs, has been mired with website glitches and a lack of communication with lenders.