US jobless rate at 14.7%, highest since Depression

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 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.

Gregory Daco, the chief U.S. economist for Oxford Economics says the Bureau of Labor Statistics may have actually undercounted the number of unemployed by "as much as 5%".

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.

Harley Lippmann, a job recruiter from Genesis10 says to get people back to work, companies that have received stimulus funding from the U.S. government should be required to hire U.S. citizens and not send jobs overseas. "They think it is cheaper labor. They measure the hidden costs, indirect cost. I think they would see it's actually more expensive."

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.

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.

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.

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 calculates job losses by surveying businesses and households. It's a net figure that also counts the hiring that some companies, like Amazon and many grocery stores, have done. By contrast, total jobless claims are a measure of just the layoff side of the equation.

The government's report noted that many people who lost jobs in April but didn't look for another one weren't even counted in the unemployment rate. They are captured in a separate index: The proportion of all working-age adults who are employed. This figure is now just 51.3%, the lowest proportion on record.

For the United States, a key question is where the job market goes from here. Applications for unemployment aid, while high, have declined for five straight weeks, a sign that the worst of the layoffs has passed. Still, few economists expect a rapid turnaround.