Jobs data puts Trump in a spot
The US economy shed 701,000 jobs in March, abruptly ending a historic 113 straight months of employment growth as stringent measures to control the novel coronavirus outbreak shuttered businesses and factories, confirming a recession is underway.
The unemployment rate rose to 4.4 per cent in March from 3.5 per cent in February. With the ranks of the unemployed ballooning, economists say the jobless rate could top 10 per cent in April. Mounting job losses spell disaster for the US gross domestic product, and economists say the government and the US Federal Reserve will need to provide additional stimulus.
The job data may impact President Donald Trump’s re-election prospects in November. Trump had stridently advocated an America first policy to protect US jobs that has led to a brusing trade war with China. The report could sharpen criticism of the US administration’s handling of the public health crisis, with Trump himself facing criticism for playing down the threat of the pandemic in its initial phases.
Already, data has shown a record 10 million Americans filed claims for unemployment benefits in the last two weeks of March.The US labour department’s closely watched employment report on Friday did not fully reflect the economic carnage being inflicted by the highly contagious virus.
The government surveyed businesses and households for the report in mid-March, before a large section of the population was under some form of a lockdown, throwing millions out of work.
“It is important to keep in mind that the March survey reference periods for the establishment and household surveys predated many business and school closures that occurred in the second half of the month,” William Beach, commissioner of the US labour department’s Bureau of Labor Statistics said in a statement.
In addition, data collection for the two surveys was affected by the coronavirus. The government said the plunge in payrolls, which snapped a record streak of employment gains dating to October 2010, reflected 459,000 job losses in the leisure and hospitality industry, mainly in food services and drinking places.