WASHINGTON (AP) — The U.S. unemployment rate rocketed to 14.7% in April, a level last seen during the Great Depression, as 20.5 million jobs vanished in the worst monthly loss on record — stark evidence of how the coronavirus has brought the economy to its knees.
The breathtaking losses, reported by the Labor Department on Friday, are certain to intensify the push-pull over how and when to ease the coast-to-coast shutdowns of factories, stores, offices and other businesses. And they rob President Donald Trump of the ability to point to a strong economy as he runs for reelection.
“The damage that we’re seeing from the great coronavirus recession is traumatic,” said Gregory Daco, chief U.S. economist at Oxford Economics. “It’s going to take a long time before the labor market recovers to its pre-recession state.”
Stocks rallied on Wall Street in the morning when it turned out the report wasn’t quite as horrific as economists had forecast. The Dow Jones Industrial Average gained more than 300 points, or 1.3%.
Worldwide, the virus has infected more than 3.8 million people and killed nearly 270,000, including over 75,000 in the U.S., according to a tally by Johns Hopkins University based on official data.
The unemployment report indicated that the vast majority of April’s job losses — roughly 75% — 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 anytime soon, though, will be determined by how well policymakers, businesses and the public manage their response to the health crisis. Economists increasingly worry that it will take years to recover all the jobs lost.
The collapse of the job market has occurred with stunning speed. In February, the unemployment rate was at a more than 50-year low of 3.5%, and employers had added jobs for a record 9½years. In March, unemployment was just 4.4%.
“In just two months the unemployment rate has gone from the lowest rate in 50 years to the highest rate in almost 90 years,” said Gus Faucher, chief economist at PNC Financial.
The last time unemployment was this high was 1939, at the tail end of the Depression. Unemployment peaked at 25% during the decade-long slump.
Nearly all the job growth achieved during the 11-year recovery from the financial meltdown has now been lost in one month.
As bad as the numbers are, they don’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 had closed down. If they had been counted correctly, the unemployment rate would have been nearly 20%, the government said.
Also, people who are out of work but aren’t actually looking for a new job are not officially counted as unemployed. An estimated 6.4 million people lost jobs last month but did not search for new ones, most likely because they saw little prospect of finding work with the economy shut down.
Counting them as unemployed would push the rate up further, to 24%, according to calculations by Heidi Shierholz, an economist at the Economic Policy Institute.
Trump, who faces the prospect of high unemployment rates through the November elections, said the figures were “no surprise.”
