There is no historical precedent for the number of jobs and lives impacted by COVID-19. Times Square, known as the crossroads of the world, remains empty as New York struggles with close to 100,000 active cases. Florida beaches, perennial hosts to thousands of spring breakers, remain closed. A pause button has been pressed on the U.S. economy, impacting millions of jobs and countless businesses.
ThinkWhy has prepared the most relevant data available with its team of expert economists to help translate challenging information during an extraordinarily challenging time.
For jobs figures reported Friday by the Bureau of Labor Statistics, it’s important to remember that the March 2020 survey reference week for the BLS household survey was the week of March 8–14. That’s a period that preceded many of the coronavirus-related business and school closures and other public health efforts to contain the spread of COVID-19.
The U.S. unemployment rate for March, as reported monthly through the BLS, rose to 4.4 percent, representing only that data collected up until March 14. Current weekly unemployment claims through the Department of Labor currently stand to be the timeliest source of available unemployment data. As reported through the week ending March 28, unemployment stands near 11.9 percent.
Why It Matters
Unlike in a typical recession, the economy is being challenged by a force that is not policy-driven. The U.S. labor market saw 52 months of job growth disappear in two weeks, and most businesses are changing strategies for the short- and long-term to keep them operational. Businesses can:
- Explore options to leverage the CARES Act to support continued business operations.
- Ensure your organization has thorough communication practices in place for all employees.
- With widespread remote working conditions, support employee engagement activities to improve retention risks.
- Prepare or update business continuity plans and plan for extended disruption.
- Seek and explore potential business affiliations to extend your resources.
- For companies and industries hiring during this time, a surplus of workers is now flooding into the job market, supporting your talent acquisition.
Labor Market Performance
- Loss of 701,000 jobs as impact of COVID-19 begins to be felt
- Employment in Leisure and Hospitality fell 459,000, 417,000 of which were in Food Service and Drinking Places.
- Labor force participation decreased to 62.7 percent
- Wage growth increased 3.1 percent, as some companies were still implementing salary increases and bonuses early in the month
- Combined January and February revisions were down by 59,000 jobs
Further evidence of COVID-19’s impact on the economy comes from available data surrounding consumer sentiment and manufacturing performance.
Consumer sentiment, a measure of consumer attitudes, dropped 11.9 index points in March, the fourth largest one-month decline in nearly 50 years. March’s Consumer sentiment, as reported by the University of Michigan, registered at 89.1, a drop from 101.0 in the previous month.
According to UM, stabilizing confidence at this point will be difficult, given surging unemployment and declining household incomes. The extent of additional declines in April will depend on success in reducing the spread of COVID-19, and how quickly households receive funds to relieve financial hardship. Mitigating the negative impacts on health and finances may curb rising pessimism but are unlikely to produce any real near-term optimism.
Institute for Supply Management PMI®
The March PMI®, reported April 1, registered 49.1 percent, down 1 percentage point from the February reading of 50.1 percent. Although this drop was not as drastic as expected, comments from the panel were negative regarding the near-term outlook, with sentiment clearly being impacted by the coronavirus) pandemic and energy market volatility.
- Of the 18 manufacturing industries, three reported employment growth in March: Printing and Related Support Activities; Food, Beverage and Tobacco Products; and Computer and Electronic Products.
- Food, Beverage and Tobacco Products saw higher inventories for March, slower supplier deliveries, and growth in new orders and production.
- Paper Products saw increases in new orders, slower supplier deliveries, and no change in production from February to March.
Industry Movement (Survey Reference Week Mar 8-14)
Leisure and Hospitality: Loss within this industry was 459,000 jobs in March. With heavy impact to restaurants, Leisure and Hospitality is now one of hardest hit industries.
Education and Health Care Services: Loss within this industry was 76,000 jobs.
Professional and Business Services: Loss within this industry was 52,000 jobs.
Trade, Transportation and Utilities: Loss within this industry was 49,000 job.
Construction: Loss within this industry was 29,000 jobs.
Manufacturing: Loss within this industry was 18,000 jobs.
Financial Activities: Loss within this industry was 1,000 jobs.
Government: Gain within this industry was 12,000 jobs.
ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs and businesses across the country. Stay current with us. We are here to support organizations and provide insights during the economic downturn as well as the recovery phase.