The latest regional job report from the U.S. Department of Labor revealed that nonfarm employment decreased in 31 states in March and was essentially unchanged everywhere else. The largest absolute losses occurred in California (-99,500), Texas (-50,900), and New York (-41,700) last month, while the biggest percentage declines were found in Louisiana and Rhode Island (-1.1 percent each), followed by Missouri and Vermont (-0.9 percent each). As for joblessness, the unemployment rate rose in 29 states in March and fell in 3 states. The lowest rate of joblessness was found in North Dakota (2.2 percent), and 25 states last month had an unemployment rate that was under the national level (4.4 percent). For an additional comparison, during the worst part of the “Great Recession” eleven states had an unemployment rate that exceeded 11 percent, while the highest rate of joblessness in the entire country last month was “just” 6.9 percent (Louisiana). However, while the March report was clearly disappointing, the April update should be much worse since the COVID-19 containment efforts did not really ramp up until the second half of March.
Moreover, the latest jobless claims data revealed that 5.245 million Americans made a first-time claim for unemployment benefits last week. That is a welcome 1.370 million decline from the previous week but still implies that what would have previously seemed like an unfathomable number of Americans continue to lose their jobs every day due to the shelter-in-place orders. For an additional perspective, over 22 million people have now filed for unemployment benefits since the coronavirus crisis began, basically wiping out all the job gains since the Great Recession ended. It is important to remember, though, that these employment figures being so terrible is precisely why the COVID-19 infection curves have started to flatten, as well as the reason optimism has grown that partial, regional economic re-openings could begin in the near future. The substantial fiscal and monetary easing from the government can help those hurt the most by the necessary lockdowns, but more must be done to make sure these individuals can access such aid. For example, the CARES Act allows millions of self-employed Americans and gig workers for the first time to be eligible for unemployment benefits, but states have varying systems that were not equipped to handle claims made by the self-employed and contractors. Updated systems are on the way but until then many Americans are not getting the assistance already available even as calls have grown for Congress to start working on the next COVID-19 relief package. Similarly, the Paycheck Protection Program helps struggling small businesses keep their workers on the payroll, but many firms, and the millions of Americans they employ, will remain at risk until Congress removes the self-imposed funding uncertainty.
Sources: Econoday, U.S. DoL, Bloomberg, ADP, FRBSL