The U.S. economy shed 20.5 million jobs in April, driving the unemployment rate up to a post-World War Two high and underscoring the devastating toll of the coronavirus pandemic on the labor market.
The job losses were the steepest since the Great Depression, with the pain spread broadly across industries ranging from hospitality to healthcare. According to the Labor Department, unemployment rose to 14.7% from 4.4% in March, shattering the post-World War Two record of 10.8% in November 1982.
“The jobs report from hell is here — one never seen before and unlikely to be seen again barring another pandemic or meteor hitting the earth,’ said senior economist Sal Guatieri of BMO Capital Markets.
Economists polled by Reuters had forecast nonfarm payrolls would dive by 22 million jobs. But The New York Times said that “If anything, the report understates the damage.”
“The government’s definition of unemployment typically requires people to be actively looking for work,” it noted. “And the unemployment rate does not reflect the millions still working who have had their hours slashed or their pay cut.”
A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, surged to 22.8% last month from 8.7% in March, suggesting nearly one in four Americans is either unemployed or underemployed.
With consumers confined to their homes due to coronavirus lockdowns, leisure and hospitality industry payrolls plunged 7.7 million in April, restaurants and bars accounting for nearly three-quarters of the decline.
In healthcare, nearly 1.5 million jobs were lost as dental and doctor offices closed, patients avoided hospitals and elective procedures were put off.
Some states have begun reopening their economies and companies such as Walmart and Amazon are hiring workers to meet huge demand in online shopping. But economists are not expecting a quick turnaround in the labor market.
“While we are hopeful many will get back to work in the coming months, there will be severe scarring effects on the labor market for years to come,” said Paul Ashworth, chief economist at Capital Economics.
Frederic J. BROWN / AFP