Updated at 10:09 a.m. ET
For the first time in nearly a decade, the U.S. suffered a net loss of jobs as the coronavirus began to take hold in the country. But a monthly snapshot from the Labor Department shows only the first pinpricks of what will soon be a gaping wound.
U.S. employers shed 701,000 jobs in March — the most since 2009, during the depths of the Great Recession, according to the monthly survey. But that was conducted three weeks ago — before the pandemic forced the widespread closing of restaurants, retail shops and other businesses.
That unprecedented shutdown has already pushed some 10 million people out of work, according to initial claims for unemployment filed in the past two weeks. Most of those job losses won't show up until the April employment report is published a month from now.
Still, Friday's report is a milestone. It snaps a record-long streak of employment gains that stretches back to the fall of 2010. The job losses, while understated, are the worst since March 2009.
The unemployment rate rose from 3.5% in February to 4.4%. That's the highest jobless rate in nearly three years, and it marks the sharpest increase since 1975.
"That will only be the tip of the iceberg," said Lydia Boussour, senior U.S. economist at Oxford Economics. "We think April will be really the month where you will see the full magnitude of that labor market collapse."
Boussour likens the abrupt halt in economic activity to what the Gulf Coast experienced during Hurricane Katrina. But in this case, the shutdown stretches across the country.
She projects that the U.S. will lose as many as 20 million jobs before the pandemic is under control and that unemployment will soar higher than at any time since World War II.
"We wouldn't have thought a few weeks ago that something like this would be possible," Boussour said. "You're basically asking people to stay home and not go to work."
More than 6.6 million Americans applied for unemployment benefits last week alone, 10 times the number who did so during the worst week of the Great Recession.
Losses are concentrated in restaurants, retail, recreation and manufacturing — all jobs that cannot easily be done at home or while practicing social distancing.
Retail and manufacturing were struggling even before the coronavirus pandemic, but restaurants and hotels had been adding jobs at a rapid pace.
About two-thirds of the job losses in Friday's report were in leisure and hospitality, especially bars and restaurants. But few industries were unscathed. Retailers shed 46,000 jobs. Construction companies lost 29,000. Even health care employment declined by 43,000 as doctors and dentists closed their offices for all nonemergency services.
STEVE INSKEEP, HOST:
A 10-year streak for the U.S. economy is over. For 10 straight years, the United States added at least a few jobs every single month, sometimes a lot of jobs. But that did not happen in March, after Americans were told to stay home in response to the pandemic. NPR's Scott Horsley joins us now. Scott, good morning.
SCOTT HORSLEY, BYLINE: Good morning, Steve.
INSKEEP: What are the Labor Department numbers out today?
HORSLEY: This report is, in some ways, a confirmation of the enormous economic hit that the coronavirus is dealing to the U.S. economy and to workers and families all around the country. As you say, it snaps that record-long streak, going back almost a decade, of job gains.
But yet this report is just revealing the first pinpricks of what is going to be a gaping wound, and that's because this report was based on surveys that were done three weeks ago, which is a lifetime ago in the course of this pandemic. I mean, three weeks ago, I was still going into the office. Most bars and restaurants were still open. Our nationwide hunker-down in response to the coronavirus would start the following week. And in the next two weeks, we know now some 10 million people would file claims for unemployment. Those job losses won't show up, though, until the April report a month from now.
INSKEEP: So we saw 700,000 jobs lost in this monthly report, but that's from the middle of the month. And now we know there's another 10 million or so at least who are out of work. We don't think that's the absolute total of them. I gather that we can expect an unbelievably devastating unemployment report for the following month, then.
HORSLEY: That's right. But we now know that even before that nationwide lockdown began, the coronavirus was having a big impact on the economy, much larger actually than forecasters had expected. And it was really pretty widespread. About two-thirds of the job losses in this report are in hospitality - mostly bars and restaurants, which had been doing pretty well until the coronavirus struck.
HORSLEY: Those industries, along with leisure, account for 459,000 of these job losses, and we know they were among the first to feel the effects. But really, the losses in this report are widespread. Retailers lost jobs. Manufacturers lost jobs. Those businesses were already slumping before the pandemic. Construction lost jobs. And, Steve, even health care, which is typically recession-proof, lost 43,000 jobs in March.
HORSLEY: Now, that might seem counterintuitive in the midst of a health care crisis, but remember - a lot of doctors and dentists have closed their offices and canceled nonemergency appointments during this pandemic.
INSKEEP: Goodness. Well, I'm trying to think of the implications of this. First off, when the employment numbers were even worse than expected, it's a bad situation now. But the other question on people's minds is how long this lasts. Is this a gigantic pothole or a long-lasting recession? What are the implications of finding out that the employment picture is even bleaker than feared?
HORSLEY: It doesn't really tell us how long it's going to last; it tells us that the pothole is deeper, but it doesn't tell us how broad it is and how long we're going to be in that pothole. That's the big question. And we've heard lots of both health care professionals and economists say that kind of is going to be dictated by the course of the virus.
HORSLEY: We do know that Congress has authorized a $2 trillion relief package. The Fed is pumping trillions more into the economy to try to cushion the blow, to try to keep both families and businesses afloat until we can get past the pandemic.
INSKEEP: Now, when we talk about this job loss, you mentioned it's in retail and hospitality. I guess the next report, we can expect it to be in pretty much every part of the economy.
HORSLEY: And even here we were seeing it broadly across the economy, but certainly, the job losses that were going to show up in April are going to be much, much deeper.
INSKEEP: OK. And unemployment is now 4.4%. That's the official figure?
HORSLEY: That's right. And again, that's just a hint of what's to come. We expect that number to go a lot higher.
INSKEEP: Scott, thanks for the update.
HORSLEY: You're very welcome.
INSKEEP: NPR chief economic correspondent Scott Horsley. Transcript provided by NPR, Copyright NPR.