A more clear picture of the COVID-19 pandemic’s devastating effect on the United States economy came into focus on Friday, as the U.S. Labor Department report revealed 20.5 million jobs were lost in April, which sent the unemployment rate to a staggering 14.7%.
The data highlights just how rapid the job market collapse has been, as the unemployment rate was at 3.5% in February, which proved to be the final month in an unprecedented 113-month run of job gains.
“It’s literally off the charts,” Michelle Meyer, head of U.S. economics at Bank of America, told The New York Times. “What would typically take months or quarters to play out in a recession happened in a matter of weeks this time.”
The damage hasn’t stopped either, as millions more people have filed claims for unemployment benefits since the data was collected in mid-April. Last month’s job losses alone exceeded the 8.7 million that were lost in the last recession when unemployment peaked at 10% in October 2009.
The jobs report shows that some of the steepest job losses are in leisure and hospitality, which lost 7.7 million jobs, and retail, which lost 2.1 million jobs. Research from Adzuna, a jobs site, found that hiring in the U.S. is down 50% over the last eight weeks, with hospitality (-83%), sales (-82%) and administrative work (-79%) suffering the most. The report, however, did highlight that there are still more than 2 million jobs being advertised currently.
Nearly 80% of the unemployed said they had been temporarily laid off and expected to return to their jobs in the coming months, which gives some economists hope that the crisis will recede just as quickly as it arrived and as the pandemic fades, businesses will begin rehiring back workers.
President Donald Trump shared this view in an interview Friday morning on Fox News. “Those jobs will all be back, and they’ll be back very soon,” Trump said, “and next year we’re going to have a phenomenal year.”
There’s a sense from economists that the job losses could be even higher in the report for May, which will reflect conditions next week. However, economists believe the unemployment rate should fall over the summer as people begin to return to work. Some states have begun to reopen their economies, and others will likely follow in the weeks to come.
About the Author
Brett Christie is the managing editor of Workspan Daily.