May 19, 2020
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Maine jobless rate remained low in March, but effect of coronavirus expected to show in April

Troy R. Bennett | BDN
Troy R. Bennett | BDN
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Maine’s jobless rate in March remained below 4 percent, extending a streak of low rates that has lasted more than four years but is likely to end in April when the economic effect of the coronavirus is reflected.

The preliminary seasonally adjusted rate in March was 3.2 percent, the same as February and little changed from the 3.1 percent last March, according to the Maine Department of Labor, which released the data on Friday.

However, the rate is based on labor force information culled during the week of the 12th of the month. The March rate is low because the survey was done before Maine substantially curtailed business and resident activities, according to Glenn Mills, an economist with the Maine Department of Labor.

“This is a highly unusual situation in that this number has to do with the timing of when states closed,” Mills said. “The unemployment rate in Maine and the United States should be substantially higher in April.”

He would not speculate about what April’s unemployment rate might be, but said it would more fully reflect the employment situation that exists now.

Gov. Janet Mills on March 24 ordered public-facing businesses that are nonessential to close just after midnight, while allowing grocery stores, pharmacies and other businesses deemed essential to remain open. Additional steps to curtail the activities of Mainers followed.

A three-week spike in new unemployment insurance claims followed the state’s closure. But the rising numbers took a breather from April 5 to April 11, when 13,421 people submitted claims, down sharply from the 30,900 the week before, according to state data released Thursday.

That’s still more than double the record of 5,634 new weekly claims set during the Great Recession in 2009. The numbers are expected to rise again once the state allows contractors and self-employed people to file unemployment claims.

Nationally, unemployed workers submitted 5.245 million new insurance claims. That brings the total new unemployment claims over the past four weeks to 22 million, according to the U.S. Department of Labor.

The preliminary U.S. unemployment rate announced earlier this month was 4.4 percent for March, up from the 3.5 percent in February and down from 3.8 percent one year ago, according to the U.S. Department of Labor.

Employers cut 701,000 jobs because of the coronavirus outbreak. Some economists say the real unemployment rate may be approaching 18 percent as the virus continues to cause workers to be idled, according to Fortune magazine. Mills said that could be the case because of the timing of when the data was pulled.

The April estimate for Maine will be published on May 22.

 


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