Friday’s U.S. jobs report from the Labor Department is expected to show U.S. employers shed nearly 30 million positions from payrolls this spring as a result of the coronavirus pandemic and related shutdowns—but that is just one of several varying estimates of job destruction.
Other data suggest layoffs might have topped 40 million, while another count shows only about 20 million are tapping unemployment benefits. No matter the measure, job loss triggered by the pandemic is historically high and likely to leave a lasting mark on the U.S. economy.
“Depending on how you count it, you’re talking about something like a quarter of all U.S. jobs being disrupted by the pandemic,” said Erica Groshen, a former Bureau of Labor Statistics commissioner appointed by President Obama.
Nonfarm payrolls fell by a combined 21.4 million in March and April, the Labor Department said. Economists surveyed by The Wall Street Journal expect the May employment report to show another 8 million jobs were lost last month—bringing the total decrease since the pandemic took hold in the U.S. to more than 29 million.
The nonfarm-payrolls figures historically have been the most closely watched measure of job creation and destruction. That is because they capture a net change in employment, balancing hiring and firing that are always occurring in both strong and weak economies. They also are based on a survey of 145,000 businesses and other employers, which is viewed as more accurate than asking individuals about their employment status, and can be benchmarked to tax records in the longer run.
Nonfarm payrolls have “a higher degree of precision than any other timely number,” Ms. Groshen said, adding that the survey reaches establishments employing about a third of U.S. workers each month.
During the pandemic-caused economic shock, economic analysts and journalists have also highlighted the cumulative number of unemployment-benefit claims, which are viewed as a proxy for layoffs. From March 15 through May 23, 40.8 million jobless claims applications have been filed.
However, many economists caution against equating that figure to the number of Americans who are unemployed as a result of the pandemic. Some applications were denied and others came from people jobless before March.
It also is likely there is some double counting among the past 10 weeks of claims. An applicant might have tried again after an initial denial, while others might have been recalled and again let go from a job.
Expanded eligibility and enhanced benefits—an extra $600 a week for those who qualify—are encouraging more Americans to apply, said University of Michigan economist Donald Grimes.
“This is a very generous program,” he said. “You’re seeing a lot of people that are applying who wouldn’t have otherwise tried.”
The cumulative figure from jobless claims also misses that some number of applicants have returned to jobs, especially as states have said more factories, construction sites and retailers can operate.
In the week ended May 16, the most recent available data, 21 million Americans were receiving unemployment benefits.
Another measure of job loss is the unemployment rate. Economists forecast that figure rose to 19.8% in May from 14.7% in April, which was already the highest on record since 1948. May’s projected rate would imply about 30 million Americans were unemployed last month.
The unemployment figures in the jobs report come from a separate survey of 60,000 households.
That number does include some who were unemployed before the pandemic began, but doesn’t count those who lost jobs and subsequently dropped out of the labor force, meaning they were unable or unwilling to return to work. For example, some Americans weren’t looking for jobs because they feared becoming ill or were responsible for caring for children who weren’t in school.
For that reason, many economists are looking at the change in the number of people reporting themselves as employed. In February, 158.8 million people said they had jobs. In April, that figure had fallen by 25 million to 133.4 million.
The bottom line is tens of millions of jobs were lost in a matter of three months—and it will likely take several years for them to be replaced.
“The magnitude and speed of this employment loss is like nothing we’ve ever seen before,” said University of Chicago economist Erik Hurst. “I think it will take multiple years before we get back to pre-March 2020 levels.”
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