Virus Wreaking Havoc On Unemployment Numbers

To virtually no one’s surprise, the continued spread of COVID-19 appears to be having a major effect on employment figures in the U.S. With a monthly jump that was the largest in 45 years, the United States Bureau of Labor announced Friday that the national unemployment rate had increased to 4.4 percent in March.

It was the first unemployment rate increase since September 2010. The spread of the coronavirus had such an impact on the numbers the Bureau of Labor included a statement detailing it at the top of its release.

“The COVID-19 virus continues to impact the number of initial claims. Nearly every state providing comments cited the COVID-19 virus,” the government said in the statement. “States continued to identify increases related to the services industries broadly, again led by accommodation and food services.

- Advertisement -

“However, state comments indicated a wider impact across industries,” the Labor Department added. “Many states continued to cite the health care and social assistance, and manufacturing industries, while an increasing number of states identified the retail and wholesale trade and construction industries.”

According to the bureau of labor’s release, the U.S. lost more than 701,000 jobs in March. That represents a 0.9-percentage-point leap, the highest since January 1975. The number of people unemployed rose to 7.1 million in March, up by some 1.4 million.

U.S. Secretary of Labor Eugene Scalia said in a statement the report reflects the “initial impact on U.S. jobs of the public health measures being taken to contain the coronavirus.” The report reflects surveys the pay period that includes March 12, and that April’s report is likely to be much more grim.

“We know that our report next month will show more extensive job losses, based on the high number of state unemployment claims reported yesterday and the week before,” Scalia said. “America’s workers and their families are making purposeful sacrifices to help save lives. This administration will continue its vigorous efforts to protect the health, safety, and security of the American people as we defeat the coronavirus.”

Other statistics contained in the Bureau of Labor’s release:

  • In March, unemployment rates rose among all major worker groups. The rate was 4.0 percent for adult men, 4.0 percent for adult women, 14.3 percent for teenagers, 4.0 percent for whites, 6.7 percent for blacks, 4.1 percent for Asians, and 6.0 percent for Hispanics.
  • The number of unemployed persons who reported being on temporary layoff more than doubled in March to 1.8 million. The number of permanent job losers increased by 177,000 to 1.5 million.
  • The number of unemployed persons who were jobless less than 5 weeks increased by 1.5 million in March to 3.5 million, accounting for almost half of the unemployed.
  • The number of long-term unemployed (those jobless for 27 weeks or more), at 1.2 million, was little changed in March and represented 15.9 percent of the unemployed.
  • The labor force participation rate, at 62.7 percent, decreased by 0.7 percentage point over the month. Total employment, as measured by the household survey, fell by 3 million to 155.8 million, and the employment-population ratio, at 60 percent, dropped by 1.1 percentage points over the month.
  • The labor force participation rate, at 62.7 percent, decreased by 0.7 percentage point over the month. Total employment, as measured by the household survey, fell by 3 million to 155.8 million, and the employment-population ratio, at 60 percent, dropped by 1.1 percentage points over the month.

Claims for state unemployment benefits were heavy in Hawaii, Michigan and Pennsylvania. According to information published by CNBC, Hawaii (73 claims per 1,000 workers), Michigan (63) and Pennsylvania (62) had the country’s highest number of unemployment claims for the week ending March 28.

The high number of claims was causing trouble for beleaguered state labor departments around the country. In Hawaii, for instance, Gov. David Ige was reassuring residents the state was fixing problems.

“Please be assured that we are taking the actions necessary to ensure that all unemployment benefits claims will be filed and paid as quickly as possible,” Ige recently told the Hawaii Tribune Herald. “Please bear with us as we develop capacity and expand points of entry for filing claims.”

Michigan’s Department of Labor and Economic Opportunity faces the same challenge. Gov. Gretchen Whitmer said Monday the state has seen more unemployment claims in the last two weeks than it did in the entirety of 2019.

“These numbers are staggering, and they will continue to climb,” Whitmer said. “We’ve had almost as many people in one day file for unemployment as any of the longest weeks of the great recession.

She said she’s cut red tape – eliminating paperwork and the date-certain requirement – and quadrupled the number of people working on getting the unemployment website functional. The site was shut down over the weekend while the state made adjustments to it.

“I understand how frustrating this can be … I’ve talked to a number of people who are trying to navigate the unemployment system,” Whitmer said. “This is hard, but we cannot proceed until we’ve got the guidance from the federal government, and until we have the ability to get everyone into the queue.”

The impact the coronavirus is having on unemployment numbers and claims prompted the labor department last week to implement the paid leave provisions of the Families First Coronavirus Response Act, according to Scalia, along with the unemployment enhancements in the CARES Act, signed into law March 27. That act provides an additional $600 per week in uemployment benefits, among other things.

The report, Scalia said in a statement, reflects “the sacrifices American workers are making for their families, neighbors and country in order to ‘slow the spread.’”

“The administration continues to act quickly to address this impact on American workers,” Scalia added.