Droves of layoffs at restaurants and bars made March 2020 one of the worst months for U.S. employment in the modern era.
The Labor Department reported Friday that payrolls plunged by 701,000, marking the first decline since 2010 and the worst fall since March 2009. The unemployment rate jumped nearly a full percentage point to 4.4% from 3.5%.
The report fails to capture the full damage from the virus so far. The Bureau of Labor Statistics used as its reference period the week ended March 12, which came just as states began their shutdowns. The April jobs report will show deeper and more widespread industry losses.
Among the hardest-hit areas of the economy was the accommodation and food services sector, which comprised more than half of the month’s net losses. Businesses that prepare meals, snacks and beverages for customers for either on-premise (sit-down restaurants and bars) or off-premise (delivery and take-out) consumption saw payrolls slide by 417,000.
The broader leisure and hospitality sector, which includes that 417,000 decline in the food services industry, saw payrolls decline by 459,000 as hotels and other lodging businesses also cut jobs. This employment decline nearly offset gains accrued over the previous two years.
The government described the degree of losses in that industry (as well as in health care and social assistance) as “notable” and said the nosedive reflects the nationwide effort to contain the spread of COVID-19.
“We cannot precisely quantify the effects of the pandemic on the job market in March. However, it is clear that the decrease in employment and hours and the increase in unemployment can be ascribed to effects of the illness and efforts to contain the virus,” the Labor Department said.
“About two-thirds of the drop occurred in leisure and hospitality, mainly in food services and drinking places,” it added.
The health care and social assistance subsector (including child day care and family services) also saw marked losses with payrolls falling by 61,200. Health care alone — typically an employment juggernaut — lost 42,500 jobs in March as dentist and physician offices cut workers amid a decline in procedures (usually a major revenue source) and an uptick in emergency-room care amid the coronavirus outbreak.
The professional and business services sector lost 52,000 jobs. Though that sector includes a wide swath of U.S. employment including lawyers, engineers and consultants, the vast majority of the layoffs were concentrated in temporary help workers, which fell by nearly 50,000.
Workers classified under “Temporary Help Services” include, but aren’t limited to, laborer and hand material movers, office clerks and packagers, who typically spent a predetermined about of time working for a variety of clients.