The American unemployment rate has risen to 4.4%, according to new figures released Friday morning by the U.S. Bureau of Labor Statistics.
The nation lost 701,000 jobs in March in the face of the coronavirus, ending a record hiring streak after nearly 10 years.
Employment in the leisure and hospitality industries fell by 459,000, mainly in food services and drinking places. Other notable declines also occurred in health care and social assistance, professional and business services, retail trade and construction.
Last month’s actual losses could be larger than Friday’s numbers because the government surveyed employers before the heaviest layoffs hit in the last two weeks.
On Thursday, the U.S. Labor Department said 6.6 million Americans filed unemployment claims during the last week, shattering the record set only one week before, a record that had stood since October 1982.
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Nearly 10 million Americans applied for unemployment benefits in the final two weeks of March, far exceeding the figure for any corresponding period on record.
Virus-induced shutdowns have forced widespread layoffs throughout the economy, from hotels, restaurants and movie theaters to auto factories, department stores and administrative offices. The nearly full point increase in the unemployment rate from February to March was the sharpest monthly rise since 1975.
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One sign of how painfully deep the job losses will likely prove to be: During its nearly decade-long hiring streak, the U.S. economy added 22.8 million jobs. Economists expect the April jobs report being released in early May to show that nearly all those jobs will have been lost.
Roughly two-thirds of the job cuts during March were at restaurants, hotels and casinos, which shed 459,000 jobs. Retailers lost 46,000, manufacturers 18,000.
As recently as February, U.S. employers had added 273,000 jobs. Some economists have now forecast that the unemployment rate could go as high as 15% within the next month. That rate would be the worst since the 1930s. During the Great Recession, unemployment peaked at 10%.
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More than 90% of the U.S. population is now 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-thru service, costing thousands of jobs.
Economists at Goldman Sachs have forecast that the economy will shrink at an annual rate of 34% in the April-June quarter — the worst fall on record dating to World War II. Goldman expects the economy to rebound with 19% 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.
Robert Kaplan, president of the Federal Reserve Bank of Dallas, said Thursday on CNBC that he expects the unemployment rate to rise to the mid-teens soon, before falling to about 8% by year’s end.
A key determinant of the economy’s future will be whether businesses can survive the shutdown and rehire many of the workers they laid off. If so, that would help the economy snap back and avoid the type of weak recovery that followed the last three downturns.
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