The Bureau of Labor Statistics (BLS) reported that 701,000 people lost jobs in March. The unemployment rate hit 4.4%. Economists said the figures were inaccurate to the extent that millions of jobs have been lost since the survey was taken. The jobless rate will soar for months, as millions of workers in deeply wounded industries and in companies trying to preserve cash are pushed off the payroll.
The peak unemployment level of the Great Depression was 24.9% in 1933. The current “civilian labor force” was 162,823,000 in March. If the jobless rate reaches what it was in 1933, 40.5 million Americans will be out of work. The number is not farfetched.
Treasury Secretary Steven Mnuchin told Congress that unemployment could reach 20% as the coronavirus spreads. At the time, the figure was considered absurd. Other forecasts are lower. Goldman Sachs put the figure at 15%. However, the St. Louis Federal Reserve Bank, which has, according to many, the best database in the country, said unemployment could reach 35%.
These forecasts were before jobless claims reached 10 million in two weeks, and the March unemployment rate was issued. Many people who are out of work have not yet filed unemployment claims. While it is impossible to give an exact number of those who have not filed yet, it is certainly into the millions. Real unemployment, as defined by the BLS, could be close to 14 million people now. That would put the jobless rate at almost 9% as of the end of this week.
The latest mass layoffs have affected millions more workers. Walt Disney laid off what is believed to be 100,000 workers. Disney has a total of 350,000 employees. The “furlough” includes most people in its largest divisions.
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Oil industry layoffs, driven by lower oil prices and the economic climate, could lead to 50,000 to 75,000 layoffs soon, according to Oilprice.com. If the price of crude drops below $20 a barrel for any amount of time, that number will increase.
The Alliance for Automotive Innovation said 42 of the 44 car assembly plants in the United States are closed. Forecasts put car sales in the United States down by 4 million this year. Between them, Ford and GM have over 400,000 workers. Many of them will have to be laid off if the car sales picture worsens. This does not include other car manufacturers with fewer workers, which in total employ tens of thousands. It also does not include the hundreds of companies that rely on the auto industry for their revenue. Parts manufacturers could disappear altogether.
Layoffs are not over in retail. J.C. Penney cut most of its 95,000 workforce. All hourly store employees were laid off Some people with administrative jobs and e-commerce positions will remain, but that is a small fraction of the total.
Macy’s, Gap and Kohl’s have already laid off tens of thousands. Several large retailers that have not made layoffs so far are expected to do so. Layoffs among retailers have topped a million, and they could be twice that. Two million jobs in one industry would be gone.
Of course, a very small number of large companies are hiring. Amazon will add as many as 150,000. Some big-box retailers, like Walmart, will add tens of thousands. However, these are by far the exceptions.
What is the number of unemployed people now? Certainly, between 10 million and 15 million. The effects of the virus on health and business are expected to worsen for months. Companies will run out of cash. To make matters worse, many doctors have forecast another wave in the fall. The rise in unemployment is not nearly over. The depression-level jobless rate of 24.9% gets closer and closer as the week pass.
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