701.000 jobs were lost in the United States in March. Since there are normally about 200.000 to 250.000 new jobs per month, this means that the corona damage on the job front amounts to about 1 million jobs. The unemployment rate has increased from 3,5 to 4,4%.
This is stated in the most recent jobs report published by the US. The US labor market is an important indicator of the economic condition of the country and therefore of its trading partners. The blow to the economy and the labor market was not only hard, but everything happened in just a few weeks. That is very short, which can significantly distort the labor market report. This may mean that some adjustments will be made next month.
In the 2 weeks ending March 28, almost 10 million Americans applied for unemployment benefits. With an unemployment rate of 3,5%, approximately 5,8 million Americans are unemployed. In March there were 7,1 million. If you add that 10 million to 5,8 million, this means that unemployment must rise to 2% and more based on the aforementioned 10 weeks alone. At first glance, but…
Be immediately available
For statistical purposes, being fired is not enough to be classified as unemployed. You also have to be immediately available to start work, for example. It is conceivable that many who have been laid off are not immediately available. For example, because they have to care for a sick family member or can get by on unemployment benefits for a while. Or don't want to work for a while because of fear of the coronavirus.
The recent labor market figures are based on surveys conducted between March 8 and 14. This means that a large portion of the approximately 10 million Americans who were laid off in the following two weeks were excluded from these statistics. They appear in the unemployment figures that we receive at the beginning of May, for the month of April. Then expect a significant increase in unemployment.
Slowly appearing in statistics
As the situation becomes more normal or the fear decreases and/or the benefit period ends, they will report as job seekers and will be counted as unemployed from that moment on. That means most of the 10 million Americans laid off in recent weeks are slowly showing up in the unemployment statistics.
There were 1,4 million more people in March than in February who worked part-time, while they wanted to work full-time. In other words: you can see this as people who have been fired for part of their working hours. However, it is not included in the unemployment statistics, but is important for the consumption of those households in the near future.
Absent from work
Add to all that those who will be laid off in the coming weeks and there is a good chance that the unemployment rate we will hear on the first Friday of May will be significantly higher than 4,4%. Ultimately, the unemployment rate will climb towards 15% and more in the coming months.
Many Americans are not unemployed but absent from work, the US Bureau of Statistics says. The intention was that these people would also be counted as unemployed. However, it is clear, the agency said, that this has not always happened. This could happen because the instructions were not clear to those taking the surveys, the respondents misunderstood the question or the interviewers wrote down the answers incorrectly. The US Bureau of Statistics estimates that if everything had gone well, the unemployment rate would have been almost 1 percentage point higher than the reported rate of 4,4%.