WASHINGTON (Reuters) - The U.S. economy shed 701,000 jobs in March, abruptly ending a historic 113 straight months of employment growth as stringent measures to control the novel coronavirus outbreak shuttered businesses and factories, confirming a recession is underway.
The Labor Department’s closely watched employment report on Friday did not fully reflect the economic carnage being inflicted by the highly contagious 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, throwing millions out of work.
William Beach, commissioner of the Labor Department’s Bureau of Labor Statistics acknowledged this short-coming in a statement and also noted that data collection for the employment report was adversely affected by the coronavirus. But Beach also said, “we still were able to obtain estimates from our two surveys that met BLS standards for accuracy and reliability.”
The plunge in payrolls, which was the steepest since March 2009 and snapped a record streak of employment gains dating to September 2010, was led by 459,000 job losses in the leisure and hospitality industry, mainly in food services and drinking places. There were also decreases in health care and social assistance, professional and business services, retail trade, manufacturing and construction payrolls.
Economists polled by Reuters had forecast nonfarm payrolls falling by 100,000 jobs last month. Adding a sting to the report, the economy created 57,000 fewer jobs in January and February than previously reported.
The worst is still to come, with a majority of Americans now under “stay-at-home” or “shelter-in-place” orders. A record 10 million Americans filed claims for unemployment benefits in the last two weeks of March. Economists expect payrolls will sink by at least 20 million jobs in April, which would blow away the record 800,000 tumble during the Great Recession.