Unemployment Rate Jumps to 4.4%, 701,000 Jobs Lost
The unemployment rate jumped to 4.4 percent in March and the economy shed 701,000 jobs.
The new numbers from the Department of Labor’s employment situation report end the record 113 straight months run of hiring.
Employment in leisure and hospitality businesses fell by 459,000, with a loss of 417,000 of jobs in bars and restaurants. That’s enough to erase two years of gains.
Economists had forecast that the government would say employers shed about 150,000 jobs and that the unemployment rate rose from a half-century low of 3.5 percent to 3.9 percent, according to FactSet.
But the jobs figures vastly understate the magnitude of last month’s losses because the government surveyed employers before the heaviest layoffs struck in the past two weeks. Nearly 10 million Americans have since applied for unemployment benefits, far more than for any corresponding period on record.
The higher than expected jobs loss and unemployment figures for March indicate that, some job cuts happened earlier in the month, when most economists think businesses began clamping down on hiring. The job loss for March underscore the head-snapping speed with which the economy has unraveled after nearly a decade in which employers added nearly 23 million jobs. As recently as February, employers added 273,000 jobs.
Economists had welcomed February’s job gain, though they wondered why hourly paychecks weren’t rising more quickly. But any concerns over sluggish wage growth have now been put well off to the side.
“Four years of job gains have evaporated in the span of two weeks,” said Daniel Zhao, an economist at the jobs website Glassdoor.
The layoffs will continue to mount. Some economists have forecast that 20 million jobs will be lost by the end of April, swelling the unemployment rate as high as 15% and wiping out the bulk of the past decade’s gains. That unemployment rate would be the worst since the 1930s.
Roughly 90 percent of the U.S. population is living under some version of a shutdown order, which has forced the closure of bars, restaurants, movie theaters, factories, gyms and most other businesses. Some hotels are closed; others are largely empty. Fast-food chains are either closed or providing only drive-through service, costing thousands of jobs.
With business activity tightly restricted, analysts expect a stomach-churning recession. Economists at Goldman Sachs have forecast that the economy will shrink at an annual rate of 34 percent in the April-June quarter — the worse fall on records dating to World War II. Goldman expects the economy to rebound with 19 percent growth in the third quarter. But even by the end of next year, the economy will not have fully recovered from the damage, Goldman projects.
–The Associated Press contributed to this report