The U.S. government's latest employment report shows that hiring plunged in March as the coronavirus brought a sudden stop to a record 113 straight months of job growth — and that, unfortunately, is the good news. The bad: The job market is likely in much worse shape than even today's dire numbers suggest.
The economy lost 701,000 jobs by the middle of last month, and the unemployment rate rose to 4.4%, the Labor Department said on Friday. The leisure and hospitality industries saw the biggest drops, with 460,000 jobs lost. Health care fell by 61,000 jobs, as dentists' and doctors' offices shut. Temporary staffing services lost 50,000 jobs and retail shed 46,000 jobs.
Payrolls also fell much more sharply in March than economists had predicted, with a consensus forecast of 100,000 job losses.
"These look bad but the April figures will be horrendous," said Fitch Ratings chief economist Brian Coulton. "The unemployment rate will surge above 10%. The jobs market and employment levels are a real-time indicator of overall activity, and right now we think activity is 20% down in the lockdown."
Next month's labor report is expected to show an even bigger hit because today's figures don't capture the full scale of job losses in March, which accelerated in the second half of the month, after the employment survey was conducted.
At least 10 million peoplein the last two weeks of March, overwhelming many states' unemployment offices. Given those figures, most economists think unemployment is now between 10% and 15%.
The March report is "a sober, clear-eyed precursor to what is going to be the largest bloodletting in the labor market since the 1929-1933 period of the Great Depression," RSM Chief Economist Joe Brusuelas said in a note.
Small businesses have been hit especially hard by the crisis, as they often have fewer resources to draw on during a slowdown, and many have been forced closed by public health measures.
Daniel Garcia, a 42-year-old taco vendor in Los Angeles, is one of the many business owners who has been forced to close. Garcia, who normally sells his goods five days a week, has been out of work since early March, when the city effectively banned street vending to slow the spread of the coronavirus. Garcia has searched for temporary work but has yet find a job, he told CBS MoneyWatch.
"The little money that I had has run out, and I don't know what I'm going to do," said Garcia, who lives with his wife and their 10-year-old daughter.
One in four small businesses in the U.S. has closed temporarily, according to a Chamber of Commerce survey released this week. Another 40% say they will close in the coming two weeks, the survey found.