US economy shed 701,000 jobs up to mid-March

Latest Labor Department stats outdo analyst predictions

                                

The US economy saw a fall in the number of jobs for the first time in more than a decade in March, with unemployment surging even beyond pessimistic analyst expectations amid the ongoing Covid-19 pandemic.

According to the latest statistics from the Department of Labor, non-farm payroll jobs fell by 701,000, far outdoing the 100,000 consensus figure compiled by Bloomberg. The unemployment rate similarly beat analyst expectations of 3.5 per cent, rising to 4.4 per cent.

As the reference period for the job report only went up to March 12, before the imposition of near-nationwide lockdowns, these latest statistics only provide insight into what is expected to be an even deeper recession.

In the two weeks subsequent to the Labor Department’s study new unemployment claims surged to a combined total of 9.9 million, a figure far surpassing the previous record.

The department stated that the: “March data from the establishment and household surveys broadly reflect some of the early effects of the coronavirus (Covid-19) pandemic on the labor market. We cannot precisely quantify the effects of the pandemic on the job market in March. However, it is clear that the decrease in employment and hours and the increase in unemployment can be ascribed to effects of the illness and efforts to contain the virus.”

The services sector has suffered the most thus far, with the sub-sector of leisure and hospitality losing 459,000 jobs, professional and business services shedding 52,000 and education and health services payrolls down 76,000.

Much speculation remains as to the extent to which the US and other leading economies will witness a V-shaped rapid recovery. With the lockdowns set to continue for at least another month, the novel coronavirus outbreak could likely trigger a depression unprecedented in recent times.

US markets have fallen on the data, with the Dow, Nasdaq and S&P down 1.11, 0.86 and 0.95 per cent respectively by mid-morning trading (EST).

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