Economy

US Economy Loses 701K Jobs; Unemployment Rises To 4.4 Pct.

The nation’s hiring boom that began more than two years ago is over, a casualty of COVID-19, as the number of workers who have lost their jobs due to the pandemic continues to grow.

On Friday (April 3), the U.S. Bureau of Labor Statistics said that total nonfarm employment fell by 701,000 jobs in March, as the unemployment rate rose to 4.4 percent from a half-century low of 3.5 percent.

The increase reflects the effects of the coronavirus and efforts to contain it, the agency said.  

Leisure and hospitality jobs were most hit as they fell by 459,000, mainly in food services and bars. There were other declines in healthcare and social assistance, professional and business services, retail, trade and construction. 

March’s unemployment increase of 0.9 percent is the largest month-over-month increase in the rate since January 1975, when the increase was the same. The number of unemployed workers rose by 1.4 million in March, reaching 7.1 million.

Mark Hamrick, senior economic analyst for Bankrate.com, said Friday’s numbers were worse than expected, representing the biggest dip in jobs since September 2009.

“Wading through the March employment report is a bit like watching the telecast of a football game after knowing the final score and that the home team suffered a crushing defeat,” he said. “The real unanswerable question at this point is how many of these jobs come back after social-distancing guidelines are relaxed and businesses reopen. We hope for the best, but brace for the worst.”

The Labor Department said March unemployment rates increased across all major worker groups. For instance, the rate was 4 percent for adult men and women and 14.3 percent for teenagers. Blacks were the hardest hit at 6.7 percent, Asians were 6 percent and whites were at 4 percent.

The number of unemployed persons who were jobless for a period of less than five weeks rose by 1.5 million in March to reach 3.5 million, representing nearly half of the unemployed.

The long-term unemployed, those without a job for a period of 27 weeks or more, at 1.2 million, did not change much in March and comprised 15.9 percent of the unemployed.

The report illustrates the tough times that small and medium-sized businesses are facing amid the coronavirus panic. More than a quarter of SMBs recently surveyed by PYMNTS said they didn’t expect to survive the economic meltdown, while another 33 percent weren’t sure.

A $350 billion U.S. government loan program for SMBs is launching Friday (April 3), but lenders reported on Thursday (April 2) that they’re not really ready.

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