Back in February, before the coronavirus pandemic brought the US economy to a standstill, the rate hovered at just 3.5 per cent. That had been the lowest level in five decades.
April’s is the highest since just after the Great Depression of the 1930s.
The Labour Department said the unadjusted unemployment rate in April would have been almost 5 percentage points higher had workers been classified as unemployed on temporary layoff, rather than employed but absent from work due to other reasons.
Furloughed workers accounted for about four out of every five unemployed Americans. 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. With little containment of a contagious disease that’s killed 75,000 Americans and counting, business is returning unevenly and slowly if at all, and signs are mounting that many employers will be forced to make the cuts permanent.
In the minutes after the report, the Bloomberg dollar index pared its decline for the day while the yield on benchmark 10-year Treasuries rose to its highs of the session after the report. S&P 500 futures maintained their gains.
Average hourly earnings rose 4.7 per cent from the prior month and 7.9% from a year earlier, skewed higher by the disproportionate loss of low-wage workers from payrolls – rather than any wage pressures boosting employee pay. The labor-force participation rate fell to 60.2 per cent from 62.7 per cent. The underemployment rate, which includes discouraged workers and those working part-time who want full hours, rose to 22.8 per cent from 8.7 per cent.
Almost every industry was hit hard. Leisure and hospitality employers cut 7.65 million, manufacturers cut 1.33 million positions and retailers 2.1 million.
Even healthcare jobs fell by 1.44 million as non-Covid-19 visits and elective procedures dried up or offices closed.
The job losses may also fan calls for a fourth round of fiscal aid from Congress on top of trillions of dollars already dispatched, even with signs that many Americans are having difficulty tapping the funds.
While the pandemic has crushed economies around the world, job losses hurt more in the US than in most other developed nations. About 160 million Americans get health insurance through employers, and without jobs, they could face steep monthly premiums or lose coverage entirely, which may worsen the economic impact of Covid-19.