In the May issue of Economy at a Glance, the Partnership examines the impact of the COVID-19 pandemic on the local economy and reviews the impact the collapse in oil prices is having on the energy industry.
Houston: The Economy at a Glance is a free monthly publication, which offers the latest data along with expert commentary on the Houston region’s economy.
To subscribe to Glance, please click here.
The U.S. Outlook
The U.S. is in a severe recession caused by the sudden shut-down due to the COVID-19 pandemic. Since the lockdown began, the nation has lost 21.4 million jobs. Employers cut 881,000 in March and another 20.5 million in April, the largest one-month loss in the nation’s history. Losses already exceed those of the Great Recession, in which 8.7 million Americans were laid off.
Data on claims for unemployment insurance (UI) through mid-May show the losses continue to mount. As of May 9, over 36.5 million Americans had filed for benefits. When the Bureau of Labor Statistics (BLS) releases its May jobs report (scheduled for June 5), losses will likely exceed 25.0 million jobs. That equates to roughly one in every six U.S. workers being laid off or furloughed.
Every sector has lost jobs, with hotels, restaurants, and bars; health services; and retail among the hardest hit. Nationwide, energy (exploration and production, support services for mining) has cut about 45,000 jobs since the downturn began. Those loses will accelerate in coming months.
Of the 150 sectors and subsectors for which BLS reports data, only six recorded gains. Those included courier services, computer manufacturing, federal government, monetary authorities (i.e., the U.S. Federal Reserve), other information services (i.e., the internet), and general merchandise stores (e.g., Target, Wal-Mart).
The unemployment rate climbed to 14.7 percent in April, a level not seen since the Great Depression. If not for errors in data collection, the rate would have been much higher.
The unemployment rate is based on a survey of house-holds. During April, surveyors were instructed to classify people not working due to the coronavirus as “unemployed on temporary layoff.” Instead, most were classified as “employed but absent from work.” This misclassification skewed the unemployment downward. If the miscounted workers had been classified properly as “unemployed,” the rate would have been closer to 20 percent.
Layoffs due to COVID-19 fell heaviest on the young, the less educated, and minorities. The unemployment rates for all groups, except for blacks, were the highest on record.
Continue reading this month's Economy at a Glance for more insight into the impact of the COVID-19 pandemic and the impact the collapse in oil prices is having on the energy industry.