Layoffs caused by efforts to slow the spread of the coronavirus continue to hollow out the U.S. labor market, with 6.6 million more Americans applying for unemployment benefits last week, the U.S. Department of Labor said Thursday.
So over the last three weeks, 16.7 million workers, more than a 10th of the nation’s workforce, have applied for unemployment benefits.
In Florida, 169,885 laid-off workers managed to navigate the state’s flawed unemployment claims website to file an application last week. Florida’s three-week total of new claims exceeds 472,000.
Michael Newell of Tallahassee lost his job in medical sales last month after business began drying up. He’s been advertising online to pick up work as a landscaper and managed to file for unemployment more than two weeks ago.
“I’m still waiting,” he said. “There’s no news, and I don’t really want to fight with the phone system after hearing all of the horror stories.”
The three-week surge in unemployment claims is being fueled in part by a new group of people never before eligible for unemployment benefits: self-employed workers, independent contractors and gig workers like Uber and Lyft drivers. For the first time, Congress allowed those workers to seek benefits as part of the $2 trillion coronavirus relief package it passed at the end of March.
As that bill passed, Florida saw its biggest week of claims so far — 228,484 new applications — with layoffs in construction, manufacturing, wholesale trade, retail trade, agriculture, forestry, fishing and hunting, and other services industries, according to the Department of Labor.
Yardi Matrix, a research and data company, recently looked at which of the country’s largest 50 metro areas had the most jobs at-risk based on the sectors expected to see the biggest losses — lodging and hospitality, retail trade, mining, logging and construction.
Las Vegas, with a huge hospitality industry, was No. 1, with 49 percent of its jobs in the at-risk sectors. But four of the top six were in Florida: Fort Lauderdale, Orlando, Miami and the southwest coast including Naples. An average of 39 percent of the jobs in those four cities are in at-risk sectors, the report found.
The Tampa Bay area ranked 11th, with 34 percent, or about 550,000 jobs, in those sectors. That’s not to say that all of those jobs will be lost — or that other sectors are safe — but it shows Florida’s vulnerabilities.
The federal stimulus package, including $600 a week for workers who lose their jobs, will help make up for some of the lost wages and provide cash to spend, wrote Paul Fiorilla, director of research at Yardi Matrix.
“There remain many areas of uncertainty, including how recipients will use the payments, whether businesses can stay solvent enough to rehire workers once the quarantine ends, and how quickly the economy will rebound once the stay-at-home orders are lifted,” he concluded.
The unemployment numbers came out at the same time Thursday morning that the Federal Reserve said it plans to take additional actions to provide up to $2.3 trillion in loans to support the economy.
While huge, the job loss statistics do not reflect that people like Newell continue to look for alternatives even as they apply for benefits, University of South Florida economist Xin Jin said. And some hiring is taking place for jobs with growing demand, like delivery services.
“If you think about the demand for those types of jobs, it’s also huge,” Jin said. As more households need deliveries, that labor “will have to come from somewhere, and that may be restaurant waitresses or other workers who got displaced due to this slowdown. So part of the market is absorbing this displacement.”
The national unemployment rate for March was 4.4 percent, but the data was collected in the first half of the month before many of the layoffs.
Some recent survey data would suggest the national unemployment rate at the end of March was close to 15 percent, said Jeff Korzenik, chief investment strategist and senior vice president at Fifth Third Bank. He thought the federal stimulus package — some of it tied to encouraging employers to keep workers on their payrolls — would stabilize the rate in the 16 to 17 percent range, assuming the country starts to get back to work in a couple of months.
“Then we can look to a path to getting out of this,” he said.
One important question: Why have some of the models consistently overestimated the number of coronavirus cases and deaths? If the answer is that social distancing is working better than expected, the country will likely have to keep the rules in place for a while. That could increase the unemployment rate and slow the recovery. But if other ways of suppressing the outbreak arise, the country might not need to stay locked down for as long.
“For instance, if we have a breakthrough in treatment — which is obviously hypothetical, but possible — then we could get back to work much more quickly,” Korzenik said. “Particularly if there is some kind of antiviral treatment that’s effective, the sooner we can get back to full employment.”
He added: “A pathway towards a safe reopening of the economy really requires us to have better testing in place than we do now.”
This report includes information from the Associated Press.
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