The U.S. unemployment rate hit 14.7% in April, the highest rate since the Great Depression, as 20.5 million jobs vanished in the worst monthly loss on record. The figures are stark evidence of the damage the coronavirus has done to a now-shattered economy.
The losses, reported by the Labor Department Friday, reflect what has become a severe recession in the US caused by sudden business shutdowns in nearly every industry. Nearly all the job growth achieved during the 11-year recovery from the Great Recession has now been lost in one month.
The report indicated that the vast majority of April's job losses — roughly 90% — are considered temporary, a result of businesses that were forced to suddenly close but hope to reopen and recall their laid-off workers. Whether most of those workers can return to their jobs anytime soon, though, will be determined by how well policymakers, businesses and the public manage their response to the public health crisis.
The collapse of the job market has occurred with stunning speed. As recently as February, the unemployment rate was a five-decade low of 3.5%, and employers had added jobs for a record 113 months. In March, the unemployment rate was just 4.4%
The jump in the unemployment rate didn't capture the full devastation wrought by the business shutdowns. The Labor Department said its survey-takers erroneously classified millions of Americans as employed in April even though their employers have closed down. These people should have been classified as on temporary layoff and therefore unemployed. If they had been counted correctly, the unemployment rate would have been nearly 20%, the government said.
President Donald Trump, who faces the prospect of high unemployment rates through the November elections, said the figures were “no surprise."
“What I can do is Ill bring it back,” Trump said. "Those jobs will all be back, and theyll be back very soon. And next year well have a phenomenal year."
But economists increasingly worry that it will take years to recover all the jobs lost. The nonpartisan Congressional Budget Office expects the jobless rate to be 9.5% by the end of 2021.
Racial minorities and lower-income workers suffered the most from the economic shutdown. Job losses were especially severe for Latinos, whose unemployment rate leapt up to 18.9% from 6% in March.
In addition to the millions of newly unemployed, 5.1 million others had their hours reduced in April. That trend, too, means less income and less spending, perpetuating the economic downturn. A measure of whats called underemployment — which counts the unemployed plus full-time workers who were reduced to part-time work — reached 22.8%, a record high.
Though some businesses are beginning to reopen in certain states, factories, hotels, restaurants, resorts, sporting venues, movie theaters and many small businesses are still largely shuttered. As companies have laid off tens of millions, lives have been upended across the country.
One of the newly unemployed, Sara Barnard, 24, of St. Louis, has lost three jobs: A floor manager at a pub and restaurant, a bartender at a small downtown tavern and as an occasional stand-up comedian. Her main job was at McGurks, an Irish pub and restaurant near downtown that closed days before St. Patricks Day. She had worked there continually since high school.
McGurks tried selling food curbside, Barnard said, but it was costing more to keep the place open than the money that was coming in. Around that time, the bar where she worked closed, and comedy jobs ended when social distancing requirements forced clubs to close.
McGurks is a St. Louis landmark, and Barnard expects it to rebound quickly once it reopens. She just doesnt know when.
Job losses and pay cuts are ranging across the world. Unemployment in the 19-country eurozone is expected to surpass 10% in coming months as more people are laid off. That figure is expected to remain lower than the U.S. unemployment rate. But it doesnt count many people who either are furloughed or whose hours are cut but who receive most of their wages from government assistance.
In France, about half the private-sector workforce is on a government paid-leave program whereby they receive up to 84% of their net salary. In Germany, 3 million workers are supported in a similar system, with the government paying up to 60% of their net pay.
In the five weeks covered by the U.S. jobs report for April, 26.5 million people applied for unemployment benefits.
The job loss reported Friday was a smaller figure because the two are measured differently: The government calRead More – Source