The March 2020 jobs report, released today, shows the grim toll the COVID-19 pandemic is taking on the labor market.
After 113 straight months of job gains, the economy lost 701K jobs between mid-February and mid-March. That is similar to the extent of the monthly job losses at the depths of the Great Depression.
Yet we know that since the reference period in the report (the week ending March 15), layoffs and furloughs due to the COVID-19 pandemic have pushed 10 million workers to apply for unemployment benefits.
Although many observers expected that hotels, restaurants, and airlines would be the industries first hit, the report shows that job losses were already broad-based in early March—led by leisure and hospitality, but large even in health care and social assistance, and professional and business services.
The unemployment rate has risen fastest for Hispanics, who make up 17.6% of those employed overall, but 27.1% of those employed in restaurants, and for young people, who are also overrepresented in the restaurant industry and many of whom have lost campus jobs.
The big question is how long this labor market freeze will last. Former U.S. Treasury Secretary Lawrence Summers is betting we’ll see a faster recovery than many people expect. He has compared it to “the recovery from the total depression that hits a Cape Cod economy every winter.” Let’s hope he is right.