The COVID-19 shutdown and the attendant wave of furloughs and layoffs sent another 6.6 million to the unemployment rolls last week.
That comes on top of the more than 10 million people total who applied for jobless benefits over the two prior weeks. (Claims from the prior week were revised up 219,000 to 6.6 million).
“The advance seasonally adjusted insured unemployment rate was 5.1 percent for the week ending March 28, an increase of 3 percentage points from the previous week’s unrevised rate,” the Labor Department said in reporting the numbers. Many states cited retail as one of the industries contributing to the increase in joblessness.
The weekly claims numbers are one of the few official economic indicators that are reported often enough to show real impact from the shutdown, which forced stores to close en masse in mid-March.
While many companies in fashion were able to keep workers on with full pay for the first few weeks, nearly all the big players — from PVH Corp. and Kohl’s Corp. to Levi Strauss & Co. — have had to furlough workers. That keeps them on the payrolls and in some cases with benefits, but stops their income and makes them eligible for unemployment benefits.
The measures are seen as temporary.
Stefan Larsson, president of Tommy Hilfiger and Calvin Klein parent PVH, told WWD this week: “Our intention is that this is all temporary through this crisis and then coming out of this, we look forward to the day when we can bring our teams safely back. And the decisions we make today are made to make us get through this time and then be able to bring the team back.”
Seventy-five percent of PVH’s 18,000 employees in North American are being furloughed or are having their hours cut.
That COVID-19 driven shutdown, multiplied many times over in fashion and across the economy, causes another big problem for fashion.
There’s no telling how quickly the economy will start back up when social distancing measures are eased. A painful recession seems a forgone conclusion, the question now is just how long it will last.
Many see employment as the single best indicator of consumer spending — and with so many people suddenly jobless and no one hiring, fashion is not going to be the first place where wary shoppers start spending when they do reemerge.