The March jobs report released Friday showed that the early impact of the coronavirus pandemic was much worse than economists expected, signaling further damage to the US economy ahead.
The US economy lost 701,000 jobs in March, according to the Labor Department’s report out Friday. That was much steeper than the 100,000 loss consensus estimate from economists. The unemployment rate jumped to 4.4% from 3.5% in February.
“These numbers were quite a gut punch,” Martha Gimbel, an economist at Schmidt Futures, told Business Insider. “What the report tells you is that the economic pain started even earlier than people thought it did.”
Friday’s report is backward looking, as it only includes data through March 14. That means it leaves out the last two weeks of the month when 10 million Americans filed for unemployment insurance as strict social distancing guidelines to curb the spread of coronavirus were ramped up across the country, fueling layoffs.
Still, the report was affected by the coronavirus pandemic. The Labor Department wrote that the decrease in employment and hours worked versus the increase in unemployment can be attributed to effects of the coronavirus and efforts to contain its spread.
It also noted that data collection for the report was impacted by the crisis. The household survey response rate (which collects data for the unemployment rate and labor force) was 10 percentage points lower than in recent months, while the establishment survey (which gathers data for the headline payrolls number) was about 9 percentage points lower than usual, the Bureau of Labor Statistics said.
“Non responses make it more difficult for the BLS to get an accurate picture of the labor market,” Bank of America economist Joseph Song wrote in a Friday note.
Here are seven charts that show just how bad the March report was.