The March numbers are in for the mighty American economy, and things look really bad. That record-long job adding period of our economy? Gone. And unemployment rate? Up, up, and away!
To maintain economic expansion, our economy needs to add 150,000 jobs per month. Did we hit that? No, not even close. We lost jobs, and we lost a lot. 701,000 jobs were lost this month, which is putting many families across the country in an unfortunate financial situation.
To demonstrate the magnitude of how bad this job loss is, the last time our economy lost this many jobs was at the height of the 2009 Great Recession. You know, the recession that sent unemployment towering to 10.1% from 4.4% and was the worst one since the Great Depression of the 1930s.
If you take a look at the numbers in retrospect, we were adding a healthy number of jobs to the economy for the most part every month right up to February 2020, when we added a solid 275,000 jobs.
So what happened? Coronavirus.
In one of my last articles, I wrote about how travel-based stocks were crashing by unprecedented amounts because of the coronavirus. And guess where most of our job losses came from this month? Of the 701,000 jobs lost in the economy this month, a staggering 459,000 of them are in the hotel and leisure industry. That’s over 65% of the job losses this month coming from an industry that should be performing strongly during this Spring Break season.
And the number of unemployed persons? Unfortunately, the magnitude of the rising unemployed population dwarfs the number of jobs lost. In this single month, we went from 1.4 million unemployed persons to 7.1 million unemployed persons. That means that the number of unemployed persons quintupled in only one month.
This surge of unemployed persons manifests itself in the unemployment rate. In March, we saw the unemployment rate tick up 0.9 percent up to 4.4 percent. That is still a relatively low unemployment rate in the grand scheme of things, but the fact that the unemployment rate rose by such a huge amount in such a short time is troubling. We didn’t even see this in the Great Recession. In fact, you would have to go all the way back to January 1975, or back to when Gerald Ford was still president and when some of our parents weren’t even born yet, to find a one-month increase as magnitudinous as this month’s increase.
Interestingly, there were some industries that saw some minor job growth. For example, the government added 12,000 jobs this month, and in the information services industry, which includes the famous technological Silicon Valley superstar companies, a growth of 2,000 jobs was recorded. So, at least there were a few positive areas of this month’s jobs report; however, the 701,000 net job loss this month certainly outweighs this.
Hopefully, the economy rebounds in April. However, as time progresses, the current situation of the American economy is starting to look less and less like a blip and more and more like a recession that we’ve been due to get hit with for some time.