Daily Management Review

The Decade Long Job Growth In US Halted By Coronavirus


The Decade Long Job Growth In US Halted By Coronavirus
A decade long continued growth of jobs in the United States was brought to a sudden and screeching halt in March with about 710,000 Americans applying for unemployment benefits ads more and more businesses shut down temporarily because of the coronavirus pandemic.
According to new data from the US Department of Labor, the biggest one-month jump in the rate of unemployment since 1975, at 4.4 per cent, was noted in the month.
More than half the cuts in jobs were in the leisure and hospitality industries.
It is now expected that the job loss – which is already greater than expected, will be worse compared to the data that was collected at the beginning of the month. Since that time, an additional 245,000 people have been infected by the coronavirus and lockdown have been imposed on a majority of states in the country which has forced businesses to also close down temporarily.
According to reports from the various states of America, about 10 million people have registered for unemployment benefits within just the last two weeks which is far higher to any other previous record numbers of unemployment.
"It's clear that the pandemic is already having a more significant impact on the labour market than most had expected even a week ago," said Andrew Hunter, senior US economist at Capital Economics.
Since September of 2010, there have been job gains in the US every month as the economy recovered from the 2008 financial crisis. The rate of unemployment in the country in February was at 3.5 per cent which was close to the record highs clocked previously.
Beth Ann Bovino, chief economist at S&P Global, the United States is potentially facing its largest contraction on record.
Last month, a report from the US Labor Department showed that about 1.8 million people were on "temporary layoff". That number was more than double of what the number was in February. And since many businesses have misclassified the status of their staff, the number is likely to rise higher, the department warned.
Even though the majority of the job losses reported last month were primarily in businesses of restaurants and bars - which were among the earliest hit by coronavirus lockdowns, other industries such as retail, construction and other services, like laundry and childcare are also being impacted by the lockdown resulting in job cuts. There have been layoffs even in the healthcare sector because of closure of offices of health sector people such as dentists and physicians.
There has been a surge in the number of people being forced to work part-time and there was a drop in the rate of participation in the workforce – denoted by people working or looking for work – which was at 62.7 per cent.
According to a survey by the Chamber of Commerce, within two months, almost a quarter of small businesses could get closed permanently.  
And according to economists, in the coming months, the rate of unemployment could rise to touch double digits.