The U.S. unemployment rate jumped to 14.7 percent in April, the highest level since the Great Depression, as most businesses shut down or severely curtailed operations to try and limit the spread of the deadly coronavirus.
The jobless rate was pushed higher because 20.5 million people lost their jobs last month, the Labor Department said Friday, wiping out a decade of job gains in a single month. The staggering losses are roughly double what the nation experienced during the 2007-09 crisis, which used to be described as the harshest economic contraction most people ever endured. Now that has been quickly dwarfed by the fallout from the global pandemic.
During March and April, President Trump and numerous state and local leaders moved to put the economy in a deep freeze in an effort to minimize exposure to the virus. This led businesses to suddenly shed millions of workers at a rapid rate. Analysts warn it could take many years to return to the 3.5 percent unemployment rate the nation experienced in February.
The sudden economic contraction has forced millions of Americans to turn to food banks and seek government aid for the first time or stop paying rent and other bills. As they go without paychecks for weeks, some have also lost health insurance and even put their homes up for sale.
Job losses began in the hospitality sector, which shed 7.7 million jobs in April, but other industries were also heavily impacted. Retail lost 2.1 million jobs and manufacturing lost 1.3 million jobs. White-collar and government jobs that typically prove resilient during downturns were also slashed, with firms shedding 2.1 million jobs. and state and local governments losing nearly a million. More state and local government jobs could be slashed in the coming weeks as officials deal with severe budget shortfalls.
There was even 1.4 million layoffs in health care last month, as patients have been putting off things beyond emergency care. Even though the April unemployment figure was horrific by most accounts, economists say the official government rate almost certainly underestimates the extent of the job losses. The Labor Department said the unemployment rate would have been about 20 percent if workers who said they were absent from work for “other reasons” had been classified as unemployed or furloughed.
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Updated: Fri, May 22nd 2020 @ 10:00am EDT