U.S. layoffs surged to record high of 11.4 million in March
FILE - In this Wednesday, April 15, 2020, file photo, an Illinois Department of Employment Security office is closed in Chicago. At least a half-dozen states, including Illinois, already have notified the federal government that they could need to borrow billions of dollars to pay unemployment benefits because their own trust funds are running out of money. Though the shortfalls won't prevent unemployed workers from getting government aid, the federal loans could lead to higher taxes for businesses in future years to repay the debt. (AP Photo/Nam Y. Huh, File)
WASHINGTON (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 Friday 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.