Economy Loses 20.5 Million Jobs in April, Unemployment Rate at 14.7%, Worst Since 1939

The economy lost 8.7 million job through the entirety of the Great Recession a decade ago, when unemployment peaked at 10 percent, and had recovered those jobs a few years ago. The highest unemployment rate recorded in the past century was in 1933, when a quarter of the workforce was out of work.

The April figures are an undercount, as they represent only a partial survey of actual job losses in April. Those losses are closer to 30 million or more, according to the cumulative total of first-time unemployment claims filed over the past few weeks, and reflect the devastating effects of the coronavirus emergency on the nation’s economy.

But a substantial number of jobs are expected to be recovered somewhat swiftly as the economy reopens: in May, half the states began the reopening process: The number of unemployed who reported being on temporary layoff or furloughs increased ten-fold in April, to 18.1 million, though the number of job losses classified as permanent increased by 544,000, to 2.0 million.

All sectors of the economy saw job losses in April, but the losses were most pronounced in leisure and hospitality–restaurants, bars, hotels, motels. The sector lost 47 percent of its work force, with 7.7 million people losing their job. Bars and restaurants accounted for About 5.5 million of those. Retail businesses lost 2.1 million jobs, with one exception: warehouses and supercenters such as Costco and Sam’s Club gained 93,000 jobs.

Education and health services lost 2.5 million jobs, with health care employment alone losing 1.4 million, including losses in dentists’ offices (503,000) and doctors’ offices (243,000). Employment also declined in social assistance (651,000), reflecting the closure of child care and other family services. Manufacturing lost 1.3 million jobs, and government sectors shed almost 1 million jobs, 80 percent of that at the local government level, which includes public-school related jobs. Construction lost just under 1 million jobs.

Minorities were especially affected by the job losses, even though all groups felt the effects. The unemployment rate in April was 13 percent for adult men, 15.5 percent for women, 31.9 percent for teenagers, 14.2 percent for whites, 16.7 percent for blacks, 14.5 percent for Asians, and 18.9 percent for Hispanics.

The job losses had a disproportionate, opposite effect on wages: In April, average hourly earnings increased by $1.34, to $30.01, possibly the largest single-month increase on record, a reflection of job loss among lower-paid workers which, according to the Labor Department’s employment summary, “put upward pressure on the average hourly earnings estimates.”

There were several caveats in the Labor Department’s report. For instance, the jobless survey is normally conducted in person and by phone. This time, personal interviews were not conducted, while the usual household survey resulted in a 70 percent response rate, compared to pre-coronavirus months, when the response rate is closer to 83 percent. That affected the accuracy of the results. Other caveats applied with regard to adjusting numbers in light of the large number of deaths over the month. While the Labor Department sought to include even furloughed workers among the unemployed, “it is apparent that not all such workers were so classified,” the department reports.