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Category: Unemployment and Covid-19
Date: 19 April 2020 If there was any doubt as to the significant impact Covid-19 is having on the USA labor market and its economy this serves as proof of just how serious the current crises is, The March 2020 unemployment rate of 4.4% recorded the 3rd biggest month on month jump in the unemployment rate in the last 70 years, according to data from the Bureau of Labor Statistics (BLS)
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Significant spike in the month on month unemployment rate with worse set to come
Data from the Bureau of Labor Statistics (BLS) shows that the March 2020 month on month unemployment rate in the United States is one of the biggest on record with it increasing from 3.5% in February 2020 to 4.4% in March 2020. And the worrying thing for US employees is the fact that as the social distancing and lockdowns continue the full impact of the Covid-19 pandemic is not fully reflected in the unemployment numbers yet, with some economists in the USA predicting that unemployment in the USA will probably top out at around 10% after the pandemic has passed, wiping years and years of employment gains out in a matter of just a few months.
US unemployment rate from January 1948
The chart below shows the monthly unemployment rate in the United States from January 1948 up to March 2020. When zooming in to the more recent periods one can clearly see the spike in the month on month unemployment rate of the United States
The summary below shows the top 10 biggest month on month changes in the unemployment rate, the unemployment rate at that time period as well as the month on month change in the unemployment rate expressed as a percentage of the total unemployment rate. So to put the 0.9% jump in the month of month unemployment rate in March 2020 into perspective, it basically shows that the US unemployment rate increased by 20.5% from February 2020 to March 2020.
Month Unemployment Rate (%) Month on Month Change (%) Percentage of Total Unemployment Rate (%)
Month Unemployment Rate (%) Month on Month Change (%) Percentage of Total Unemployment Rate (%)
- Oct-49 7.9 1.3 16.5
- Dec-53 4.5 1 22.2
- Mar-20 4.4 0.9 20.5
- Jan-75 8.1 0.9 11.1
- May-49 6.1 0.8 13.1
- Apr-58 7.4 0.7 9.5
- Feb-58 6.4 0.6 9.4
- Mar-60 5.4 0.6 11.1
- Dec-74 7.2 0.6 8.3
- Apr-80 6.9 0.6 8.7
While the US unemployment rate is set to increase significantly, the US has seen a lot tougher times and it has recovered from this before and it will do so again. It is still expected that once the pandemic passes the US economy will recover quickly, as the underlying drivers of the economy is still strong and economists expect a sharp recovery once the US economy starts opening up again after extended periods of lockdowns and social distancing regulations.