With shops and factories closed nationwide due to the coronavirus pandemic, nearly all of the jobs created in the US economy in the last decade were wiped out in a single month.
An unprecedented 20.5 million jobs were destroyed in April in the world’s largest economy, driving the unemployment rate to 14.7 percent compared to 4.4 percent in March, the Labor Department said in its monthly report, the first to capture the impact of a full month of the lockdowns.
The United States is home to the world’s largest and deadliest coronavirus outbreak, with more than 75,000 fatalities and 1.2 million cases reported as of Thursday, according to Johns Hopkins University.
The economic damage has been swift and stunning.
In the two years of the global financial crisis, the world’s largest economy lost 8.6 million jobs and the unemployment rate peaked at 10 percent in October 2009. During the recovery, from February 2010 to February 2020, 23 million positions were created.
The plunge in nonfarm payroll employment last month was the largest ever recorded dating back to 1939, while the jobless rate saw its highest and biggest increase dating back to 1948, the report said.
And job losses in March were worse than initially reported, falling 870,000 even though the business closures happened mostly in the second half of the month.
Employment fell sharply in all major industry sectors. Leisure and hospitality was the first sector hit and the one bearing the brunt of the impact of the lockdowns, and posted a loss of 7.7 million jobs.
However, the Labor Department noted that some workers were misclassified in the report as employed when they should have been counted as laid off. Had they been listed properly, the unemployment rate would have been nearly five percentage points higher.
‘Nowhere near peaking’
President Donald Trump said Friday the numbers were expected, and promised: “I’ll bring it back.”
“Our country is warriors and maybe now more than ever because they are going back to work,” he said on Fox News.
And even that double-digit rate underestimates the impact of the virus, since many employees are simply leaving the workforce altogether or have been forced into part-time work instead of full time.
The measure of the labor force as a share of the total population dropped to 51.3 percent, its lowest in history, while number of people not in the labor force who currently want a job nearly doubled to 9.9 million.
New claims for unemployment benefits remain at a staggering 33.5 million since mid-March, meaning the jobless rate could go much higher still.
“We knew it was bad out there but it is looking like it is even worse that we thought,” economist Joel Naroff said in his analysis prior to the release of the data.
“Now I am wondering if we will hit 40 million (jobs lost), which would take us to an unemployment rate of 25 percent or more. That is truly scary, as you have to go back to the early 1930s, during the Great Depression, to see anything nearly like that,” he said.
Despite nearly $3 trillion in financial aid approved by Congress in March alone and trillions more in liquidity provided by the Federal Reserve, there is a growing fear that the temporary shutdowns imposed to contain the spread of the virus will become permanent for many companies.