Fueled by coronavirus, US jobless rate hits 14.7%
Stunning figure for April is worst since Great Depression
WASHINGTON — 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 on Friday, reflect what has become a severe recession 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 been lost in one month.
The report indicated that roughly 75% of April’s job losses are considered temporary, a result of businesses that were forced to suddenly close but hope to reopen and recall their laidoff 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.
As recently as February, the unemployment rate was at 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 surveytakers 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 I’ll bring it back,” Trump said. “Those jobs will all be back, and they’ll be back very soon. And next year we’ll 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 shot 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 what’s called underemployment — which counts the unemployed plus fulltime 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.
In the five weeks covered by the U.S. jobs report for April, 26.5 million people applied for unemployment benefits.