WASHINGTON (AP) – America’s workers likely suffered another devastating blow in May, with millions more jobs lost to the viral pandemic and an unemployment rate near or even above 20 per cent for the first time since the Great Depression.
Economists forecast that the government will report that employers shed 8.5 million more jobs last month on top of 21.4 million lost in March and April.
A figure that large would raise the total losses since the coronavirus intensified nearly three months ago to almost 30 million – more than triple the number of jobs lost during the 2008-2009 Great Recession.
The economy has sunk into what looks like a deep recession, and most economists foresee unemployment remaining above 10 per cent – its peak during the Great Recession – through the November elections and into next year.
A report on Thursday on applications for unemployment benefits reinforced the picture of a bleak job market: The number of people seeking jobless aid last week was double the previous record high that prevailed before the viral outbreak occurred.
Still, that report did offer a few glimmers of hope. As restaurants, movie theatres, gyms, hair salons and other retail establishments gradually reopen, job cuts are slowing and employers are recalling some of their laid-off workers. The total number of people receiving unemployment aid rose slightly, the government said, but stayed below a peak of 25 million reached two weeks earlier. And the number of laid-off workers applying for aid, while historically high, has declined for nine straight weeks.
The economic shock, like the pandemic itself, has widened economic disparities that have disproportionately hurt minorities and lower-educated workers. More than 55 per cent of African-Americans said they or someone in their household has lost income since mid-March, compared with 43 per cent of whites, according to a weekly survey by the Census Bureau. For Hispanics, the figure is 60 per cent. The pandemic has especially eliminated jobs, at least temporarily, at restaurants, hotels, retail chains and other lower-wage industries.
The street protests over George Floyd’s killing that led to some vandalism and looting in dozens of cities won’t affect yesterday’s jobs figures, which were compiled in the middle of May. But business closures related to the unrest could cause job losses that would be reflected in the June jobs report to be issued next month.
A few businesses are reporting signs of progress even in hard-hit industries. American Airlines, for example, said this week that it would fly 55 per cent of its US routes in July, up from just 20 per cent in May. And the Cheesecake Factory said one-quarter of its nearly 300 restaurants have reopened, though with limited capacity. Sales at those restaurants are at nearly 75 per cent of the levels reached a year ago, the company said. Both companies’ share prices rose.
Those limited gains may lead to more rehiring as companies slowly restart shuttered businesses. But economists said the pace of hiring will then likely lag as a severe recession and high unemployment hold back consumer spending, the main driver of the economy.
Erica Groshen, a labour economist at Cornell University and a former commissioner of the Labor Department’s Bureau of Labor Statistics, said hiring could ramp up relatively quickly in coming months and reduce unemployment to low double-digits by year’s end.
“Then my inclination is that it will be a long, slow slog,” she said.
Overhanging the jobs picture is widespread uncertainty about how long the unemployed will remain out of work. Most of the layoffs in recent months were a direct result of the sudden shutdowns of businesses in response to the coronavirus pandemic.