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Jobless rate spikes to 14.7%, highest since Great 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.

Posted: May 8, 2020 8:12 AM
Updated: May 8, 2020 8:38 AM

WASHINGTON (AP) — 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.

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. 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.

President Donald Trump, who faces the prospect of high unemployment rates through the November elections, said the figures were “no surprise."

“What I can do is I’ll bring it back,” Trump said. "Those jobs will all be back, and they’ll be back very soon. And next year we’ll have a phenomenal year."

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.

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. Their exit helped drive down the proportion of working-age Americans who were employed in April: It's now just 51.3%, the lowest proportion on record.

In addition to the millions of newly unemployed, 5.1 million others had their hours reduced in April. That trend, too, means less income and less spending, perpetuating the economic downturn. A measure of what’s called underemployment — which counts the unemployed plus full-time workers who were reduced to part-time work — reached 22.8%, a record high.

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.

One of the newly unemployed, Sara Barnard, 24, of St. Louis, has lost three jobs: A floor manager at a pub and restaurant, a bartender at a small downtown tavern and the occasional stand-up comedian. Her main job was at McGurk’s, an Irish pub and restaurant near downtown that closed days before St. Patrick’s Day. She had worked there continually since high school.

McGurk’s tried selling food curbside, Barnard said, but it was costing more to keep the place open than the money that was coming in. Around that time, the bar where she worked closed, and comedy jobs ended when social distancing requirements forced clubs to close.

McGurk’s is a St. Louis landmark, and Barnard expects it to rebound quickly once it reopens. She just doesn’t know when.

Job losses and pay cuts are ranging across the world. Unemployment in the 19-country eurozone is expected to surpass 10% in coming months as more people are laid off. That figure is expected to remain lower than the U.S. unemployment rate. But it doesn’t count many people who either are furloughed or whose hours are cut but who receive most of their wages from government assistance.

In France, about half the private-sector workforce is on a government paid-leave program whereby they receive up to 84% of their net salary. In Germany, 3 million workers are supported in a similar system, with the government paying up to 60% of their net pay.

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.

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.

A paper by economists at the San Francisco Federal Reserve estimates that under an optimistic scenario that assumes shutdowns are lifted quickly, the unemployment rate could fall back to about 4% by mid-2021.

But if shutdowns recur and hiring revives more slowly, the jobless rate could remain in double-digits until the end of 2021, the San Francisco Fed economists predict.

Raj Chetty, a Harvard economist, is tracking real-time data on the economy, including consumer spending, small business hiring and job postings. Chetty noted the economy’s health will hinge on when the viral outbreak has subsided enough that most Americans will feel comfortable returning to restaurants, bars, movie theaters and shops.

The data suggests that many small businesses are holding on in hopes that spending and the economy will rebound soon, he said. Small business payrolls have fallen sharply but have leveled off in recent weeks. And job postings haven’t dropped nearly as much as total jobs have. But it’s unclear how much longer those trends will persist.

“There’s only so long you can hold out,” Chetty said.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 915942

Reported Deaths: 9606
CountyCasesDeaths
Hennepin1786832038
Ramsey739711046
Dakota67683587
Anoka64112577
Washington40545359
Stearns33631279
St. Louis29591409
Scott25994186
Wright25957217
Olmsted22339130
Sherburne19000127
Carver1670669
Clay12104105
Blue Earth1147970
Rice11451138
Crow Wing11213123
Chisago995379
Kandiyohi9815108
Otter Tail9813127
Benton9033125
Beltrami816997
Goodhue811798
Douglas7875101
Itasca772299
Mower733449
McLeod713084
Winona710258
Isanti700783
Steele685731
Morrison672879
Becker628574
Polk603187
Freeborn561246
Carlton546974
Mille Lacs532479
Lyon528461
Nobles525054
Nicollet522460
Pine515043
Cass501253
Todd492843
Brown470759
Le Sueur459734
Meeker433458
Martin386544
Wabasha375510
Waseca374333
Dodge361112
Hubbard355249
Roseau316231
Fillmore305315
Wadena302940
Redwood281445
Houston272017
Renville268451
Faribault258233
Sibley252317
Pennington252130
Kanabec250136
Cottonwood230132
Aitkin222450
Chippewa220542
Pope207410
Watonwan198020
Yellow Medicine188023
Rock177729
Koochiching176725
Swift173123
Stevens167511
Jackson161016
Clearwater158020
Marshall153522
Murray151811
Pipestone149729
Lake132924
Lac qui Parle123025
Wilkin121116
Mahnomen106014
Norman10509
Grant101510
Big Stone9485
Lincoln8805
Kittson73223
Red Lake71410
Traverse6056
Unassigned545124
Lake of the Woods5265
Cook3071

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 525758

Reported Deaths: 7379
CountyCasesDeaths
Polk81677809
Linn32838430
Scott27126295
Black Hawk22334382
Woodbury20736263
Johnson20150108
Dubuque18996243
Pottawattamie16215214
Dallas15573115
Story1398059
Warren8637107
Cerro Gordo8141125
Clinton7928115
Webster7419124
Des Moines7153106
Marshall675494
Muscatine6717117
Wapello6546145
Jasper630591
Sioux622477
Lee5977106
Marion567697
Buena Vista503449
Plymouth493388
Henry427155
Benton414760
Jones413564
Bremer403873
Boone397042
Washington395464
Carroll373355
Mahaska372366
Crawford355647
Jackson324047
Dickinson317555
Buchanan312743
Delaware303255
Clay297636
Kossuth293477
Fayette290356
Hardin289253
Tama282878
Page276133
Wright270050
Cedar269527
Winneshiek267744
Hamilton262757
Floyd261049
Clayton252360
Poweshiek242043
Harrison240979
Madison237425
Butler237346
Cass235667
Iowa234336
Jefferson228544
Mills225330
Hancock222840
Winnebago222339
Cherokee217347
Appanoose210157
Lyon209842
Allamakee209456
Calhoun199519
Shelby199542
Union197141
Humboldt188231
Franklin188031
Grundy186137
Chickasaw184522
Mitchell184343
Emmet180146
Louisa178653
Sac175626
Guthrie169338
Clarke163629
Montgomery163146
Keokuk152639
Palo Alto152332
Howard150624
Monroe144340
Ida134141
Greene128818
Davis126825
Lucas126127
Monona124940
Worth12309
Pocahontas122125
Adair118239
Osceola105718
Decatur104813
Taylor100914
Fremont98913
Van Buren95922
Wayne86125
Ringgold78429
Audubon77617
Adams5869
Unassigned500
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