Record 20.5 million American jobs lost in April. Unemployment rate soars to 14.7%

With much of the American economy in self-imposed shutdown to prevent the spread of coronavirus, April's colossal surge in unemployment delivered a historic...

Posted: May 8, 2020 10:41 AM
Updated: May 8, 2020 2:15 PM

With much of the American economy in self-imposed shutdown to prevent the spread of coronavirus, April's colossal surge in unemployment delivered a historic blow to workers.

The US economy lost 20.5 million jobs in April, the Bureau of Labor Statistics said Friday — by far the most sudden and largest decline since the government began tracking the data in 1939.

Those losses follow steep cutbacks in March as well, when employers slashed 870,000 jobs. Those two months amount to layoffs so severe, they more than double the 8.7 million jobs lost during the financial crisis.

For many Americans who lost their jobs and their homes in the 2008 financial crisis, this moment reopens old wounds. It took years to rebound from those setbacks. When the economy eventually did crawl back, US employers added 22.8 million jobs over 10 years — a victory for all those who had weathered the Great Recession.

Now, the coronavirus pandemic stings not only because of the public health crisis it has inflicted — but also because it wiped out nearly that whole decade of job gains in just two months.

The unemployment rate soared to 14.7% in April, its highest level since the BLS started recording the monthly rate in 1948. The last time American joblessness was that severe was the Great Depression: The unemployment rate peaked at 24.9% in 1933, according to historical annual estimates from the BLS.

By all accounts, it's been a devastating two months for American workers.

'Each unemployed person is a person whose life is now in turmoil,' White House Economic Advisor Kevin Hassett told CNN's Poppy Harlow, describing the report as 'heartbreaking.'

How we got here

In late March, state and local governments enacted stay-at-home orders to slow the spread of the coronavirus. Businesses suddenly closed en masse, laying off or furloughing millions of workers.

The government's jobs report shows some of the steepest job losses in leisure and hospitality, which lost 7.7 million jobs, and retail, which lost 2.1 million jobs.

Even as hospitals struggled to serve an influx in patients, health care workers suffered layoffs, too, with outpatient services like physicians and dentists' offices cutting 1.2 million jobs in April.

Food and beverage stores, which have also been essential during the crisis, lost 42,000 jobs.

And as terrible as those numbers are, they don't tell the full story.

The jobs numbers come from a survey of employers, and do not include independent contractors like Uber and Lyft drivers in the gig economy.

Likewise, the unemployment rate, which comes from a survey of households, probably undercounts the number of jobless Americans, too.

People are only counted as 'unemployed' by the BLS when they have been out of work but actively searched for a new job in the prior four weeks. Or, if they were a 'temporary layoff' with the expectation of being rehired within six months.

Among the 23 million people who were counted as unemployed in April, about 18 million were 'on temporary layoff.' While that's a stark number, it could be an encouraging sign that for many people, job losses could be short lived — and they'll be able to return to work when businesses re-open.

That said, millions of other laid-off workers were not even included in the unemployment rate. With much of the country still under stay-at-home orders, many jobless workers weren't looking for new jobs in April. Instead of being counted as 'unemployed,' those people were categorized as having dropped out of the labor force. The employment-population ratio, which measures the share of the US population over age 16 with a job, shrank to 51.3% in April, down from 60% in March and its lowest level on record since the BLS started tracking that number in 1948.

Economists expect many people will be able to find work again as businesses gradually reopen, but it could take months or even years for the job market to return to its pre-pandemic strength.

Ripple effects

Historically, the most disruptive aspect of recessions has been that jobs disappear and it takes years for companies to create new ones, said Adam Ozimek, chief economist at Upwork, a website that connects businesses and freelancers. That dynamic may be different in the coronavirus recession, where the optimistic outlook is that many — but not all — jobs will bounce back.

The leisure and hospitality sectors could take longer to recover, as social distancing policies have destroyed companies' business models.

Barbara Hull, 38, was a server at Caesar's Palace in Las Vegas until March 18 when the lockdown began. 'We all kind of knew it was coming,' she said.

'Financially, it's scary for us [servers], because when we're going back we don't know what we're going back to,' she said about the reopening of the economy. 'The whole point of Vegas is to bring people together for this experience, and we don't know how long it will take until we get back to that.'

She can't imagine it will be the same experience with servers like herself wearing face masks, she said.

Economists also worry about whether consumers will feel comfortable going back to restaurants or traveling after restrictions lift. For people like Hull this could mean less work and much lower tips after the reopening. Cautious consumer behavior could delay an economic recovery.

'You're going to see weaker demand for jobs that involve a lot of face-to-face interaction,' Ozimek said, adding that jobs that can be done remotely will be relatively safer throughout the crisis.

But experts also worry about a second wave of Covid-19 infections in the second half of the year. A resurgence in cases could steamroll a recovery.

It's also a scary world for recent graduates looking for employment during the crisis.

Micaela Stoia, 22, from Oxnard, California, was furloughed from her job as a dog trainer at Petco when the lockdown started. She filed for unemployment benefits, but has yet to receive any money. Stoia studied political science in college and has aspirations to eventually work in government.

'By the time I'm 26 I will need a steady job with good benefits,' she said. 'I have type I diabetes and I need those health benefits. I've been working toward that goal, but the pandemic has put everything on hold.'

'It's a little hard to get started if I only have my degree and no experience,' she added. 'Nobody is hiring for internships.'

Ozimek predicts state and local government jobs could be next in line for layoffs. Various municipalities have already had to lay off workers. Dayton, Ohio, for example, has furloughed a quarter of its workforce, and Detroit is looking to lay off part-time workers to fund its multimillion-dollar budget deficit.

Governments respond

Comparisons to the Great Depression may seem dire, and although the coronavirus jobs crisis is historically deep, economists don't predict it will be as severe as the economic downturn in the 1930s. The Great Depression lasted for 12 years, and the US lacked a social safety net at that time.

In the current crisis, the government acted quickly to expand unemployment benefits, extend funding to businesses and send out stimulus checks to individuals earning less than $99,000 a year. Although those programs have been far from perfect, they nevertheless provide much needed relief to some workers and employers.

In response to the pandemic, Congress expanded unemployment benefits to include an additional $600 per week for up to four months.

It also expanded who can file for unemployment benefits to include contractors, the self-employed and workers in the gig economy. But many states have struggled to keep up with the sudden onslaught in unemployment claims.

New York Gov. Andrew Cuomo said in April that the state hired an additional 1,000 people just to process claims. In neighboring New Jersey, Gov. Phil Murphy was looking for volunteers who know the decades-old computer programming language COBOL because many of the state's systems still run on older mainframes.

And the backlog hasn't helped people get their benefits payments in a timely manner. In late April, Florida reported that the state had paid out less than a quarter of claims filed since mid-March, for example.

It will take time for the US labor market to recover from this unprecedented hit. Federal Reserve Chairman Jerome Powell said last week that it would be a while until America gets back to its historically low February unemployment figure.

— Tami Luhby and Katie Lobosco contributed to this report.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 665285

Reported Deaths: 12697
CountyCasesDeaths
Marion910581653
Lake48637887
Allen36050641
Hamilton32231398
St. Joseph30243514
Elkhart25484420
Vanderburgh21315382
Tippecanoe20185205
Johnson16425361
Porter16053276
Hendricks15899301
Clark12032182
Madison11779321
Vigo11672231
Monroe10394164
Delaware9879179
LaPorte9821198
Howard9095199
Kosciusko8588111
Bartholomew7504147
Warrick7445153
Hancock7439134
Floyd7255172
Wayne6654192
Grant6453157
Boone611991
Morgan6118126
Dubois5933112
Dearborn550669
Cass5477100
Marshall5446105
Henry542695
Noble510978
Jackson465567
Shelby462591
Lawrence4193113
Gibson404985
Harrison402764
Clinton397053
Montgomery390584
DeKalb387178
Knox357885
Miami357863
Whitley350638
Huntington348377
Steuben339855
Wabash333076
Putnam331960
Ripley327862
Adams325149
Jasper318443
White298052
Jefferson295974
Daviess285696
Fayette272656
Decatur271388
Greene262280
Posey261432
Wells258975
Scott251450
LaGrange242170
Clay241444
Randolph225877
Spencer219330
Jennings216344
Washington213027
Sullivan203639
Fountain202542
Starke189251
Owen183453
Fulton179637
Jay178528
Carroll176919
Perry173836
Orange171351
Rush165422
Vermillion161542
Franklin159735
Tipton149241
Parke140116
Pike128433
Blackford120627
Pulaski107544
Newton96732
Brown95240
Benton92413
Crawford92113
Martin80314
Warren75914
Switzerland7558
Union67510
Ohio54111
Unassigned0434

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 976230

Reported Deaths: 17501
CountyCasesDeaths
Franklin1127971251
Cuyahoga966701881
Hamilton737981067
Montgomery47453923
Summit40562831
Butler35750531
Lucas35685720
Stark29548826
Warren22539275
Lorain22149424
Mahoning19556551
Lake18509332
Clermont18484205
Delaware16576121
Licking15063194
Fairfield14622188
Trumbull14397424
Greene13636221
Medina13484237
Clark12352256
Wood11633170
Portage11104172
Allen10815216
Richland10360188
Miami10055194
Muskingum8224117
Columbiana8165210
Pickaway8085111
Tuscarawas8065232
Marion8015127
Wayne7915199
Erie6948146
Ross6170132
Geauga6105142
Hancock6021121
Ashtabula5998154
Scioto599188
Lawrence527186
Union515641
Darke5046116
Belmont4990137
Huron4848108
Jefferson4831137
Sandusky4791112
Washington473696
Seneca4720111
Athens465849
Mercer459181
Auglaize456682
Shelby442579
Knox4053105
Putnam400393
Madison394755
Fulton382561
Ashland381983
Brown374352
Defiance373588
Crawford359598
Logan356973
Preble353887
Clinton342055
Highland328451
Ottawa325171
Williams303268
Jackson291246
Champaign290149
Guernsey288745
Perry270748
Fayette269843
Morrow261137
Henry247361
Hardin246859
Holmes244097
Coshocton240056
Van Wert230257
Gallia223538
Adams218139
Pike216728
Wyandot212050
Hocking194954
Carroll181743
Paulding160834
Meigs136031
Noble129233
Monroe117137
Morgan101620
Harrison100731
Vinton76613
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