April 3, 2020

America’s job market flips from hot to frozen

[POLITICO, Elaine Thompson/AP Photo]

Experts and analysts warn that the nationwide unemployment could rise into the mid-teens by summer.

Some 10 million workers have applied for unemployment benefits in two weeks, a once-unimaginable number that amounts to nearly one out of every 20 working-age Americans. And that’s just the start.

The government’s latest monthly employment report, released Friday, showed early signs of trouble in an economy facing a potentially crippling recession, with U.S. employers shedding 701,000 jobs in March and the unemployment rate rising to 4.4 percent. It marked the first time the economy has lost jobs since September 2010, ending a remarkable 113-month streak of growth.

But even those grim numbers come from a survey of payrolls in the second week in March — just before the coronavirus pandemic upended the economy, forcing massive business closures across the country.

Now, experts and analysts warn that as U.S. cities remain shuttered nationwide, layoffs will pile up far higher — likely pushing the nationwide unemployment rate into the mid-teens by summer. Estimates on the high end stretch above 30 percent, which would leave nearly 1 in 3 working Americans jobless in a matter of months.

“Numbers that seemed completely outlandish before now seem like they could be quite likely,” said Julia Pollak, a labor economist with ZipRecruiter.

The weekly jobless claims numbers — which have already shattered records for two straight weeks — are expected to remain elevated for several more, as overloaded state unemployment offices continue processing new claims and gig workers newly eligible for benefits under the $2 trillion rescue package Congress passed last month will start filing for the first time.

And depending on how long shelter-in-place orders stay in effect, some economists warn there could soon be more rounds of layoffs in industries where, for now, people are still collecting paychecks.


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