Unemployment numbers are in, and to the surprise of no one, they are not good. 20.5 million Americans lost their jobs in April, bringing the headline unemployment number to 14.7%. March unemployment was revised upwards, to from 701,000 job losses to 870,000. The numbers are a stark reversal of the beginning of the year, when unemployment reached a 50 year low. The details paint a grim picture.
Hospitality and leisure were the hardest hit, cutting 7.65 million positions. Retail and professional and business services each saw payrolls drop 2.1 million employees. Education, and perhaps counterintuitively, healthcare both lost 2.5 million positions. Healthcare workers who are not involved with the pandemic saw non-emergency procedures dry up and fewer people wanting to patronize healthcare facilities. Manufacturing lost 1.3 million jobs. Transportation and warehousing fared somewhat better, ‘only’ cutting payrolls by 584,000.
Strangely, average hourly wages actually rose by 7.9% yearly, reflecting that most job losses occurred at the lower end of the pay scale. Economists expected wages to gain 3.3% this month.
The labor force participation rate (the number of people either working or actively looking for work) slumped to 60.7%, the lowest rate since 1973. Laid off workers are unable to find new jobs or are unwilling to risk job hunting out of fear of getting sick. The number of furloughed workers stands at 18.1 million, while 2 million jobs were lost permanently.
The numbers today exceed job losses during the 2008-2009 recession, which peaked at 10%. Unemployment soared to nearly 25% during the Great Depression.
‘The changes in these measures reflect the effects of the coronavirus (COVID-19) pandemic and efforts to contain it,’ according to a statement released by the Bureau of Labor Statistics. How long this situation lasts depends on how long it takes for consumers to start patronizing businesses again.