March 2020 Jobs Report: Shockingly Bad and Bracing for Worse
The US economy lost 701,000 jobs last month, and the unemployment rate is at 4.4%, up from 3.5% in February.
Today’s numbers are shockingly bad and an understatement of the damage already done to the US economy. 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.
The unemployment rate jumped by almost a full percentage point. Even that number understates the damage done, as the labor force participation rate also dropped substantially. The share of prime-age workers with a job dropped 0.9 percentage points. That one month drop is equivalent to going back to its rate almost a year ago.
Almost two-thirds of the decline in employment growth came from leisure and hospitality. Again, the reference point for this number is from before most businesses shut down or cut hours. If hiring in this sector deteriorated so quickly, the spread of economic carnage to other sectors could be swift and severe.
We need to brace ourselves for what future reports will show. This report understates the pain inflicted upon the US economy. The data in coming months will almost certainly be worse.
Nick Bunker is the Economic Research Director for North America at the Indeed Hiring Lab who focuses on the U.S. labor market. He was previously a Senior Policy Analyst at the Washington Center for Equitable Growth, an economics think tank. Prior to that, Nick was a Research Assistant at the Center for American Progress. He holds a B.S.F.S. in international economics from Georgetown University.