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The U.S economy lost 701,000 jobs in March, the Bureau of Labor Statistics announced. The unemployment rate rose to 4.4% in March from 3.5%, a 50-year low, in February.
The survey behind the numbers was completed by March 12 so it didn't capture the full carnage of job cuts in the last half of the month. For example, in the current survey retailers showed a loss of just 46,000 jobs. Macy's alone has furloughed 130,000 workers in the last half of March. That has led economists to project that April job losses will be much, much higher. For example, Oxford Economist, a forecasting company, has projected that the unemployment rate will climb to 16% in May. That would mean the loss of 27.9 million jobs in three months, more than double the 8.7 million jobs lost during the 2007-2008 recession. Those 8.7 million jobs were lost over the course of more than two years.
An unemployment rate above 15% would be the highest since 1940, the eve of U.S. entry into World War II. Unemployment hit 10% in October 2009. The previous high was 10.8% in 1982. During the Great Depression unemployment peaked at 24.9% in 1933.
Borrowers who lost income from the coronavirus can ask to skip payments for as many as 180 days at a time on federally backed mortgages, and avoid penalties and a hit to their credit scores. But as Bloomberg notes, it's not a payment holiday and eventually homeowners they'll have to make it all up. According to estimates by Moody's Analytics chief economist Mark Zandi, as many as 30% of Americans with home loans – about 15 million households – could stop paying if the U.S. economy remains closed through the summer or beyond.
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