US sheds over 700,000 jobs in March

Job seeker Carlos Zambrano fills out an application at a career fair in Los Angeles on March 5, 2020. PHOTO: AFP

WASHINGTON • The US economy shed jobs last month, abruptly ending a historic 113 straight months of employment growth as stringent measures to control the coronavirus pandemic shuttered businesses and factories, all but confirming a recession is underway.

The US Labour Department said employers cut 701,000 jobs in March after adding a revised 275,000 in February. The unemployment rate shot up to 4.4 per cent from 3.5 per cent.

According to a Reuters survey of economists, non-farm payrolls had been forecast to decrease by 100,000 jobs last month, snapping a record streak of employment gains dating to October 2010. Unemployment was seen rising to 3.8 per cent.

Yesterday's report is far from an accurate depiction of the economic carnage being inflicted by the virus. The government surveyed businesses and households for the report in mid-March, before a large section of the population was under some form of a lockdown. Already, data has shown a record 10 million Americans filed claims for unemployment benefits in the last two weeks of March.

Job losses are similarly mounting across Europe, intensifying pressure on governments to protect their labour markets.

Spain has shed an unprecedented 900,000 jobs since it imposed a nationwide lockdown in mid-March, with temporary layoffs affecting at least 620,000 other jobs. In Britain, close to a million people have claimed state welfare to boost their incomes in the past two weeks.

European Commission president Ursula von der Leyen said the European Union would allocate up to €100 billion (S$155 billion) to the hardest-hit countries, starting with Italy, to help cover the cost of lost wages and to preserve jobs.

Italy's main business association on Thursday said it saw the country's industrial production falling as much as 15 per cent in the second quarter of the year, after an 11-year record drop in the first three months of 2020.

REUTERS, BLOOMBERG

Join ST's Telegram channel and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on April 04, 2020, with the headline US sheds over 700,000 jobs in March. Subscribe