US unemployment surges as coronavirus lockdown takes toll
US unemployment surged in March as coronavirus sent the economy into a tailspin, official data has shown.
US employers laid off 701,000 workers in March after hiring 275,000 in February, the Labor Department (DoL) said. Analysts had been expected a fall of 100,000.
The figures represent an abrupt end to the US labour market’s winning streak, which has seen it add jobs for 113 straight months.
However, things are in fact much worse than the non-farm payrolls figures out today suggest.
Jobless claims figures from the Labor Department have shown that 10 million Americans have claimed for unemployment insurance in the last two weeks.
For today’s non-farm payrolls data, the department surveyed companies in the middle of the month. This was before coronavirus lockdown measures took hold.
The unemployment rate shot up to 4.4 per cent in March from 3.5 in February, the DoL said. But that figure is likely to surge in the coming months.
Job losses soon to surge
Today’s reading “has not even illustrated the full extent of the devastating impact covid-19 is having on the US economy,” said James Ingram, investment manager at stockbroker MB Capital.
Gregory Daco, chief US economist at consultancy Oxford Economics, said April’s report “will reveal the full magnitude of the virus”.
“We expect payrolls will drop by a staggering 20m and the unemployment rate will spike to over 10 per cent, with further job losses into May.”
The job figures came with the US in the middle of a “very difficult two weeks,” in the words of US President Donald Trump.
The US now has the most cases of any country, with more than 240,000 confirmed infections.
Whole swathes of the country are on lockdown to limit the spread of coronavirus.
Fitch Ratings yesterday said it thinks the US economy as a whole will shrink by 1.9 per cent in 2020.