US layoffs surged to record high of 11.4m
Industrial production plunges 11.2% in April
WASHINGTON, May 18, (AP): U.S. layoffs soared in March to a record 11.4 million after state and local governments closed restaurants, bars, movie theaters and other nonessential businesses in response to the intensifying viral outbreak.
The Labor Department also said that job openings plunged, and hiring fell, though those changes weren’t nearly as dramatic as layoffs, which rose more than six-fold. The number of available jobs dropped nearly 12%, to 6.2 million. The number of hires declined 13%, to 5.2 million.
New data is revealing how the severity of this downturn has skewed the nature of U.S. recessions.
Businesses typically cut back on hiring first as the economy begins to slow. Layoffs then intensify once employers start to accept that a recession is at hand.
In the pandemic, the layoffs have been immediate and massive.
“Workers lost jobs at a horrifying rate,” said Nick Bunker, director of research at Indeed, the job listings website. “Employers led with layoffs and hiring slowed, but not as dramatically as one might have expected.”
The fact that job openings and hiring did not fall more in March suggests companies held out hope that the recession would be brief, and that they would be able to soon return to previous job search and hiring plans. Data from job sites like Indeed, which are more current, indicate that job openings fell further in April, a sign that businesses are bracing for a lengthier slowdown.
Layoffs jumped the most in restaurants and bars, where they surged almost 20-fold to 4.4 million. Retailers also reported an enormous increase, to 1.1 million in March from 224,000 in February.
The figures lag more recent data such as the April jobs report, released last week, which showed the unemployment rate leapt to 14.7% that month, the highest since the Great Depression. More than 20 million jobs were lost. But Friday’s report, known as the Job Openings and
Labor Turnover survey, or JOLTS, helps illustrate how businesses responded to the initial viral outbreak.
The JOLTS also reports overall hiring figures, while the monthly jobs data reflects net changes.
Weekly jobless claims data show that layoffs have declined for six straight weeks after soaring in late March, but remain at historically high levels. Nearly 3 million people sought unemployment aid last week.
Tens of thousands of jobs lost are taking place at factories. On Friday, the U.S. also reported that American industry suffered the most severe plunge on record last month with factories, mines and utilities battered by the coronavirus pandemic.
Meanwhile, American industry suffered the most severe plunge on record last month with factories, mines and utilities battered by the coronavirus pandemic.
The Federal Reserve said that its industrial production index tumbled a record 11.2% in April. Manufacturing output also posted a record drop 13.7% - as production of cars, trucks and auto parts plummeted more than 70%. Production of aerospace and other transportation products, metals and furniture fell around 20%. Output dropped 6.1% at mines and 0.9% at utilities.
The implosion of the U.S. industrial sector was not unexpected, “but one can’t help but grimace,” Jennifer Lee, senior economist at BMO Capital Markets, wrote in a research report.
Industry was running at 64.9% of capacity last month, shattering the previous record low set in the Great Recession year 2009. Factory capacity utilization also hit a record low 61.1%.
Manufacturing may get a boost over the coming week as auto plants begin to reopen.
“Auto output at the large factories is slated to resume on Monday,” said Stephen Stanley, chief economist at Amherst Pierpont Securities, “so we should see a pickup in manufacturing activity in May. ‘’