U.S. Shed 701,000 Jobs in March in Foretaste of Worse to Come

(C) Reuters.

By Geoffrey Smith

Investing.com — The U.S. economy shed 701,000 jobs in the month to mid-March, the government said in a monthly labor market report that predates the worst of the impact from the Covid-19 pandemic on the U.S. economy.

The figures, normally the most eagerly-awaited data of the month in global financial markets, have already been rendered largely meaningless by the unprecedented spike in jobless claims over the subsequent two weeks. Nearly 10 million Americans – 6% of a total workforce of 164 million – have filed for unemployment benefit since the Bureau of Labor Statistics’ cut-off date of March 12.

Analysts had expected a drop of 100,000 in overall employment, according to an Investing.com poll, roughly in line with figures reported by private payrolls processor ADP (NASDAQ:ADP) earlier in the week.

According to think-tank Oxford Economics, the jobs lost are just the tip of the iceberg. Its analysts expect the U.S. economy to shed more jobs through May than it created in the whole of the expansion since 2009. Oxford’s Greg Daco said he expects 24 million jobs to disappear in April.

As expected, the leisure and hospitality sector bore the brunt of the job losses, shedding 459,000 jobs.

According to the government’s data, the unemployment rate rose to 4.4% from a multi-year low of 3.5%, above forecasts for a rate of 3.8%. Cleveland Fed President Loretta Mester told Bloomberg on Thursday that she expected the jobless rate to rise to 15% as regional lockdowns feed through into the data.

Average hourly earnings growth accelerated to 3.1%, while weekly hours worked fell to 34.2 from 34.4, the Bureau of Labor Statistics said.