9.5% Unemployment Rate Is Here Already

The March Challenger job cut announcements report is supposed to be a leading indicator for the labor market since announcements occur before actions. The report showed there were 222,288 new job cut announcements which was up from February’s 56,660. That’s the highest monthly total since January 2009 which had 241,749 cuts. March had a 267% yearly increase. This report doesn’t include the hundreds of thousands of workers who were furloughed. In Q1, there were 346,863 cuts which was up 82% from last year and the highest quarterly total since Q1 2009.

The pandemic caused 141,844 of the cuts in March. The hardest-hit industry was entertainment/leisure which had 83,234 cuts as you can see from the table below. Autos had 11,991 cuts and services had 8,430. Services might see more weakness in April because the sector involves human to human contact.

Source: Challenger, Gray, & Christmas

There was a 57.6% increase in cuts in the Eastern region year to date as it had 88,956 cuts in March. New York had 30,873 cuts in March which is higher than the 27,953 cuts in the first 3 months of 2019. The Midwest saw the 2nd biggest spike as there were 37,809 cuts; year to date yearly growth was 116.5%. The West was the worst hit which makes sense because California has been shut down for weeks. Yearly year to date growth in cuts was 117.6% as there were 72,871 cuts in March. Finally, the South was up the least as it has had a year to date growth of 41.3% and 22,652 cuts in March.

There also were a lot of hiring announcements because some industries such as groceries and online shopping have seen a big increase in demand. There were 824,610 hires announced. That’s more than the full year of hires announced in 2014 and 2015. COVID-19 caused 821,810 hires. Most of the hires were in retail and transportation which had 462,010 and 302,000. Specifically, Instacart had 300,000 hires, Wal-Mart had 150,000 hires, Amazon had 100,000 hires, and both CVS and Dollar General had 50,000 hires each.

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