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March jobs report reflects coronavirus impacts; NAFCU expects a bumpy recovery
With 701,000 jobs lost in March, NAFCU Chief Economist and Vice President of Research Curt Long said that, as forecasts worsen, "credit unions should be prepared for a bumpy and tepid recovery." Additionally, the unemployment rate rose to 4.4 percent – the largest month-over-month increase in the rate since January 1975.
“The March jobs report captured more job losses than was expected, but it is still nowhere close to the present level of unemployment,” noted Long in a new NAFCU Macro Data Flash report. “The timing of the survey – second week of March – puts these numbers at the very beginning of the country's shutdowns, obscuring the full picture of job losses.
“It was not until the middle of the month that states began ordering restaurants to close. Even still, losses in the restaurant industry accounted for two-thirds of total losses. Broader business closures in the second half of March and beginning of April will be reflected in the next release,” suggested Long.
Other insights from the report indicate negative results among the major industries. The leisure and hospitality sector shed 459,000 jobs, followed by the health care and social assistance sector losing 61,000 jobs. The professional business services sector and the retail sector lost 52,000 and 46,000 jobs respectively.
Average hourly earnings rose by eleven cents to $28.62 over the time period, while year-over-year wage growth rose 3.1 percent.
“NAFCU has consistently warned that hiring may be slow to return even after the worst of the health crisis is over, and a recent forecast from the Congressional Budget Office shows an unemployment rate of 9 percent at the end of 2021," Long concluded. “While this seems high today, with each passing day the forecasts worsen. The uncertainty of the health crisis means we do not know how long businesses will stay shuttered and, when those measures are relaxed, whether the virus will remain contained.”