The unprecedented shutdown of the U.S. economy in the face of the worst health pandemic the world has seen in more than 100 years was already inflicting damage on the jobs market by mid-March, figures released by the U.S. Labor Department showed on Friday.
U.S. companies shed a whopping 701,000 positions in March, pushing the jobless rate up almost a full percentage point to 4.4%, marking the most monthly job losses since March 2009 and the end of a 10-year run of employment gains as the start of the biggest full-stop in the economy in history began to unfold.
The labor force participation rate - a measure of those either working or seeking work, dropped 0.7% to 62.7%, its lowest in almost a year.
Even then, the numbers only reflect the Labor Department's tally of the employment picture up to March 21 - before states began implementing non-essential shutdowns of business - from restaurants and bars to retail stores to movie theaters and theme parks.
"Note that the March survey reference periods for both surveys predated many coronavirus-related business and school closures that occurred in the second half of the month," the BLS itself said.
"Today’s numbers are shockingly bad and an understatement of the damage already done to the U.S. economy," said Indeed economic research Director Nick Bunker. "If this is an indication of what was happening before the full force of the crisis hit, then it will be hard to come up with the words to describe the numbers in future months."
About two-thirds of the drop occurred in leisure and hospitality, mainly in food services and drinking places, where shuttered doors amounted to 459,000 fewer jobs last month. Other notable declines also occurred in healthcare and social assistance, professional and business services, retail trade, and construction, the Labor Department said.
The numbers were a rearview-mirror look at a jobs market largely still unaffected by the coronavirus outbreak, which as of the end of February remained a far-away phenomenon that had not yet directly begun to impact American businesses.
Indeed, they followed behind Thursday's equally shocking jobless claims figures, which showed a dramatic 6.6 million Americans filed for unemployment benefits in the week ended March 28.
In March, average hourly earnings increased by 11 cents to $28.62. Over the past 12 months, average hourly earnings have increased by 3.1%, the government ds
April's jobs report, which will include the last two weeks of March as well as the first two weeks of this month, is due out May 8, and could show the largest ever one-month decline in the U.S. labor market.
The nonpartisan Congressional Budget Office said Thursday that the unemployment rate is likely to exceed 10% in the second quarter. Economists from Goldman Sachs, Morgan Stanley, S&P Global and others are expecting even worse than that, based on the nearly 10 million jobless claims filed in the final two weeks of March.
The highest monthly unemployment rate on record was 10.8%, set in late 1982 during the deep recession under President Reagan.
"We need to brace ourselves for what future reports will show," said Bunker. "This report understates the pain inflicted upon the US economy. The data in coming months will almost certainly be worse."