BLS April jobs report: Unemployment skyrockets to 14.7%

Donald Trump gesturing while standing on the White House lawn

Donald Trump gesturing while standing on the White House lawn

Some states have already started to relax restrictions, but re-starting the economy is likely to be hard, as workers worry about the risk of infection and grapple with the impact of school closures.

The jaw-dropping job losses in the last two months pushed nonfarm employment to its lowest level since February 2011.

As horrific as the April unemployment figure, economists say the official government rate nearly certainly underestimates the extent of the job losses.

"In just two months the unemployment rate has gone from the lowest rate in 50 years to the highest rate in nearly 90 years", stated Gus Faucher, chief economist at PNC Financial. By some calculations, the unemployment rate stands at 23.6 per cent, not far from the Depression peak of almost 25 per cent. The unemployment rate is now the highest since the Great Depression.

April's losses erase roughly all of the jobs that the economy had added in this past decade's expansion and lay bare just how precarious employment is for vast swaths of Americans. According to the Labor Department, unemployment rose to 14.7% from 4.4% in March, shattering the post-World War Two record of 10.8% in November 1982.

That's because about 160 million Americans get health insurance through employers, and without jobs, they could face steep monthly premiums or lose coverage entirely, which may exacerbate the economic impact of the coronavirus. "This number would've been taken the week of April 12, think about what's happened since April 12". This is the highest level of the seasonally adjusted insured unemployment rate in the history of the series.

The true numbers are probably even worse: Economists say that timing and measurement issues nearly certainly underestimate the true extent of the damage. He says the May numbers will also likely be around 20%.

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As expected, the leisure and hospitality sector bore the biggest brunt of job losses, shedding more than 7.6 million jobs in April alone, 5.5 million that stemmed from eating and drinking establishments. Government employment also dropped by 980,000 in April, according to the bureau.

Beach also urged caution when interpreting the $1.34 rise in average hourly earnings, because it reflects the disproportionate loss of low-wage jobs.

BLS has other unemployment metrics to help capture this unprecedented labor market situation.

But that is more optimistic than a number of economists, who believe that the recovery will be gradual, as different sectors gradually reopen. The rate for teenagers hit 31.9%. Looking ahead to next month, with many States reopening their economies, the May report may show early signs of the economic comeback.

The report is based on surveys conducted in the middle of April, and claims for jobless benefits suggest that millions of additional jobs have been lost since then.

Workers' economic sacrifices allowed the United States to keep healthcare capacity from being exceeded in most of the Nation. And the longer the shutdown lasts, the more likely it is that a business will not survive.

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