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The Department of Labor announced Friday that the U.S. unemployment rate rose to 14.7 percent from just 4.4 percent in March and a near 50-year low of 3.5 percent in February before the virus hit the U.S.
More than 20 million people in the U.S. lost their jobs in April, and the unemployment rate more than tripled as the COVID-19 pandemic shuttered the world's largest economy, triggering a financial crisis unseen since the Great Depression.
The Department of Labor announced Friday that the U.S. unemployment rate rose to 14.7 percent from just 4.4 percent in March and a near 50-year low of 3.5 percent in February before the virus hit the U.S. This last monthly report is the first to capture the impact of a full month of the lockdowns due to coronavirus.
With shops and factories closed nationwide due to the pandemic, nearly all of the jobs created in the U.S. economy in the last decade were wiped out in just two months.
Leisure and hospitality were the sectors most affected by the lockdowns, posting a loss of 7.7 million jobs – nearly equivalent to the 8.6 million total jobs lost in the two years of the global financial crisis while manufacturing lost 1.3 million positions.
Taken together, 21.4 million jobs were destroyed in March and April, nearly equal to the 23 million positions created in the economy's long expansion from February 2010 to February 2020.
However, despite this fearful data, the real picture likely is much worse, because of government errors and the Department's particular way of measuring the job market.
The Labor Department noted the unemployment rate would have been closer to 20 percent, but some workers were misclassified as employed when they had been laid off. So, according to some calculations, the unemployment rate stands at 23.6 percent, not far from the Depression peak of nearly 25 percent.
"The jobs report from hell is here," said Sal Guatieri, senior economist at BMO Capital Markets, "one never seen before and unlikely to be seen again barring another pandemic or meteor hitting the Earth."
On the other hand, minorities were hit particularly hard: African American unemployment spiked to 16.7 percent from 6.7 percent in March, while the rate for Hispanics was 18.9 percent, more than triple last month.
Also, some 6 million people dropped out of the labor force during the month – meaning they stopped looking for work. The labor force participation rate – which measures the percentage of the population working or looking for work – dropped 2.5 percent over the month to 60.2 percent, the lowest rate since January 1973.
"The beginning of this likely 'Pandemic Recession' is unprecedented," co-author John Grigsby said on Twitter. "Labor market declines (are) concentrated among low-income workers and small firms, precisely those that are unlikely to have savings to smooth over the shock."
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 from the lockdowns to contain the virus has been swift and stunning, despite nearly $3 trillion in financial aid approved by Congress a few weeks ago. Everything seems to indicate that it will be difficult to bear the damage caused to the economy and workers.
Meanwhile, Friday's report follows the news on Thursday that another 3.2 million Americans filed for unemployment benefits last week. The number of filings has been declining weekly but remains at a historically high level.