US unemployment rate jumps to 14.7 per cent as economy loses 20.5 million jobs

An unprecedented 20.5 million Americans lost their jobs in April and the unemployment rate in the US jumped to 14.7 per cent, the highest level since the Great Depression, as the coronavirus pandemic severely curtailed operations in the world’s largest economy.

The Department of Labor announced Friday that the US unemployment rate rose to 14.7 per cent from just 4.4 per cent in March and a near 50-year low of 3.5 per cent in February before the US was hit by the virus.

“Total nonfarm payroll employment fell by 20.5 million in April, and the unemployment rate rose to 14.7 per cent,” the US Bureau of Labor Statistics reported Friday.

In April, the unemployment rate increased by 10.3 percentage points to 14.7 per cent.

Larry Kudlow, the economic advisor to US President Donald Trump, told reporters at the White House said that May is going to be another tough month.

“May is going to be another tough month. Look, these numbers, these are numbers that are full of hardship and heartbreak. This is a function of the pandemic as we know. It's a pandemic contraction as we know,” Kudlow said.

"The reason I've dodged specific numbers is simply because I don’t think any economic models are any good in this particular environment,” he said in response to a question.

Kudlow said that he has noted many times that the Congressional Budget Office and most private forecasting surveys show very strong growth rebound in third quarter.

“And that does jibe with what we’re thinking. Which is interesting to see it in those other sources," he said.

“Second half of the year should be very strong, and then I think if we can get a pro-growth, pro-incentive policy mix, which the president firmly believes in, 2021 could be a fantastic year. You can really get a big, big, big, big recovery in 2021," Kudlow said.

"I would expect the numbers for May will be difficult. I would expect that. Now the weekly unemployment claims are worth looking at. They're still rising... but the rate of decline is slowing. So that’s a glimmer. I don’t want to put too much emphasis on that,” he said.

The rescue package has had a cushioning effect, he said.

Kudlow said that about three-fourths of the 20 million jobs losses reported Friday look to be "temporary layoffs.”

“That doesn’t lessen the hardship, but it does suggest that things like the payroll protection program, and the unemployment insurance, and the economic impact checks and other things has had some cushioning effect,” he said.

“If we’re right about the temporary layoffs, then people will go back to work fairly rapidly. Not all of them, mind you, but a good chunk,” he added.

April’s staggering job losses also shattered records for both the largest one-month decline in jobs — roughly 2 million in September 1945 — and the highest level of unemployment ever recorded by the Bureau of Labor Statistics, 10.8 per cent in November 1982.

Friday’s report follows the news on Thursday that another 3.2 million Americans filed for unemployment benefits last week.

The pandemic has killed nearly 76,000 people in the United States and infected over 1.2 million.