Economy

Unemployment Rate Soars to 14.7%, Worst Since Great Depression

Unemployment Rate Soars to 14.7%, Worst Since Great Depression”

Battering the US economy, COVID-19 shutdowns and destruction of demand have erased a staggering 20.5 million jobs in April, the steepest plunge in nonfarm payrolls since the Great Depression.

In the harshest downturn for American workers in USA history, employers cut an unprecedented 20.5 million jobs in April and the unemployment rate more than tripled to 14.7 per cent.

Every major sector of the economy hemoeragged jobs last month, but losses were particularly acute in leisure and hospitality where employment plummeted by 7.7 million, or 47 percent. "This is the highest rate and the largest over-the-month increase in the history of the series (seasonally adjusted data are available back to January 1948)", the US Labour Department said in its monthly jobs report. According to the report, there were an additional 10.9 million people who were involuntarily reduced from full-time work to part-time work during the month.

The latest figures do not account for the many people who lost their jobs in April but didn't look for another one, including millions of workers furloughed during the pandemic.

The unemployment rate was highest for Hispanic Americans (18.9%), followed by black Americans (16.7%).

"Our economy is on life support now", said Erica Groshen, a former commissioner of the Labor Department's Bureau of Labor Statistics.

We have never seen anything like this before.

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Shierholz, senior economist and director of policy at EPI, explained that "only about two-thirds of coronavirus-related job losses are showing up as unemployed-the rest are showing up as having dropped out of the labor force".

The Bureau of Labor Statistics said Friday the unemployment rate in April soared to 14.7 percent, the worst level since the Great Depression. The bulk of that was in food services and drinking places, which shed 5.5 million jobs, and the retail sector also took a big hit, declining by 2.1 million. Leslie Calhoun lost his job cleaning Atlantic City, New Jersey, casinos after 20 years.

"Although the unemployment rate only climbed to 14.7%, slightly below expectations, that was principally because the BLS is still having problems with misclassifying absent workers who should have been recorded as on temporary layoff", Capital Economics chief United States economist Paul Ashworth wrote in a note to clients. "Total job losses over the last two months would fill all 30 now empty Major League Baseball stadiums 16 times over".

In just over a month, the coronavirus has wiped out all job gains since the Great Recession and brought the country's decade-long record economic growth streak to an abrupt halt. "We have put our economy into a medically induced coma in order to heal it from the pandemic. and that has led to the most precipitous loss of jobs seen in any of the modern data".

April's is the highest since just after the Great Depression of the 1930s.

Trump, who faces the prospect of high unemployment rates through the November election, said the figures were "no surprise" and later added that he's in "no rush" to negotiate another financial rescue bill. "If I will not have childcare, I will not be able to go back".

"And we are putting in an unprecedented amount of fiscal relief into the economy", he said.



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