WASHINGTON: A staggering 10 million US workers have lost their jobs in the second half of March as the coronavirus forced stores and businesses nationwide to close their doors.
But those losses, which are expected to get worse, will not be fully reflected in Friday’s all-important government employment report for March.
The latest data have left analysts at a loss for words as they try to gauge the damage, while politicians and economists blame policymakers and President Donald Trump for failing to prepare the country for the unprecedented economic hit.
Another 6.65 million US workers filed for unemployment benefits for the first time last week, the most ever recorded, the Labour Department reported Thursday.
The tally for the week ended March 28 was double the amount registered in the previous week, which was revised up by 24,000 to 3.3 million.
The result far surpassed even the highest of estimates by economists and reflected the growing damage to the US economy as the pandemic worsens – with more than one million confirmed cases worldwide – and the rising death toll prompts more states to impose lockdowns.
However, because of how the Labour Department calculates the monthly jobs report, economists expect it will show a paltry drop of 150,000.
The report looks at payroll data in the week including the 12th day of the month – which in March was before the most stringent lockdowns took effect, so it likely will reflect only some of the early layoffs in hotels and airlines.
And Florida, which relies heavily on the now-crippled tourism industry, resisted issuing a stay-at-home order until this week.
The state received more jobless claims last week than the entire country did a year ago.
It will get worse
The unemployment rate is expected to worsen to 4% from the 50-year low of 3.5%, but that too will give an overly favourable picture of the labour market.
The rate is expected to soar into the double digits in April, passing the worst moment of the 2008 global financial crisis.
Bustling cities have been turned into ghost towns, as Covid-19 restrictions have forced shops, hotels, restaurants, factories and offices to close, leaving grocery stores and hospitals the lone epicentres of activity.
Some economists are predicting the worst job losses since World War II, with the country already in a severe recession.
Mickey Levy of Berenberg Capital Markets notes that the two-week total for initial jobless claims is 9.9 million “which is almost twice the 5.8 million persons counted as unemployed in February, when the unemployment rate was 3.5%.”
Las Vegas bartender Jessie Klenke lost her job March 18 and has been relying on her unemployment benefit and her parents’ help to pay the bills but will not be counted among the unemployed in the March report.
“I have friends telling us about food stamps, so I’ll be considering that,” she told AFP.
“Anything helps at this point.”
Even analysts who had expected grim jobless claims figures were stunned.
“No words for this,” said Ian Shepherdson of Pantheon Macroeconomics, dismissing Friday’s data as “completely irrelevant.”
“With another week of huge job losses now underway we’d guess that the true unemployment rate right now is about 12.5%.”
And he warned, “It will rise above that level, though, as job losses appear to be continuing at an astonishingly rapid pace.”
Gregory Daco of Oxford Economics said jobs losses could top 20 million.
The government last week approved a US$2.2 trillion rescue package that includes a massive expansion and extension of unemployment benefits to cushion the blow for the millions of workers left without a paycheck.
The program also includes US$349 billion in loans to businesses that will be forgiven if they are primarily used to pay workers, even those already dismissed.
Former vice-president Joe Biden, the Democratic frontrunner in the November presidential election, blamed President Donald Trump for delaying the response to the crisis.
“Donald Trump is not responsible for the coronavirus, but he is responsible for failing to prepare our nation,” Biden said in a statement, lambasting “the erratic and unacceptably slow federal response that has tragically lagged behind other countries.”
Trump said Thursday the government is “racing” to get relief to workers and small businesses.
“Take care of your workers,” he urged at the daily White House briefing.