RALEIGH, N.C. (WNCN) — A grim monthly federal jobs report marked by unemployment reaching levels not seen since the Great Depression and the worst monthly job loss on record did not come as a surprise to at least one local economist.
Michael Walden, a professor and economist at North Carolina State University, expects a similar one in June during what he called “a mandated recession” due to measures taken to control the spread of the coronavirus.
But before the pandemic brought the economy to a halt in March amid a string of business closures and stay-at-home orders, its fundamentals were strong, and that’s why he hopes for an economic recovery once the virus is brought under control.
“These bad numbers should not be surprising in that context,” Walden said. “The bottom line of that is this is something we have had to go through to deal with this virus, and then once we control this virus — get treatment, get a vaccine, whatever it takes — the good news is, the economy should bounce back.”
The U.S. unemployment rate in April reached its highest rate since the 1930s, hitting 14.7 percent, while 20.5 million jobs were lost, according to a monthly job report released Friday by the Labor Department.
“Almost no one alive today has ever lived through unemployment numbers as bad as these,” Duke University professor of finance David Robinson said.
According to the report, roughly 90 percent of the job losses are considered temporary, with many closed businesses hoping to bring back workers they laid off once they reopen.
The report also underscores the breathtaking speed with which the economy flipped: The unemployment rate in February was at a 50-year-low at 3.5 percent and was at 4.4 percent last month.
Robinson called them “scary numbers.”
“Unemployment has played out relatively slow, over the course of months (in the past) but what we are seeing is weekly changes that completely distort the scale of unemployment that we’re used to,” Robinson said. “Even though we’re going to come out of this in a recession, we’re not going to be living with 20 percent unemployment for the foreseeable future.
“Many of these jobs will come back once the economy returns to a more or less new normal, so the fact that we’re in this state where people are afraid to go out, once that fear subsides, many of these jobs will come back,” he said.
Locally, the unemployment rate in North Carolina has not yet been released. Robinson estimated that rate to be between 16 percent and 18 percent.
According to the latest numbers from the state Division of Employment Security, an additional 16,020 unemployment claims were filed Thursday, bringing the state’s total to nearly 1.1 million since March 15 with nearly 84 percent of those related to COVID-19.
The division also released unemployment insurance data for March, breaking down claims filed by county, gender, race and other demographics.
The data showed 83 percent of the 339,885 claims filed that month were related to COVID-19. Statewide, women outnumbered men by almost 2 to 1 in filing claims, and almost 29 percent of filers were between the ages of 25 and 34.
Walden says people ask him if the coronavirus and economic crises will tarnish North Carolina’s brand as a destination to live and conduct business.
“And my answer is no,” he said. “I don’t see anything in the numbers that shows us worse than anyplace else. It think we’ll pick up where we left off eventually.”