April 2020 job report: unemployment rises after massive layoffs in April


These losses also follow large reductions in March, when employers cut 870,000 jobs. These two months represent layoffs so severe that they more than doubled the 8.7 million jobs lost during the financial crisis.

For many Americans who lost their jobs and their homes during the 2008 financial crisis, this moment reopens old wounds. It took years to rebound from these setbacks. When the economy finally rebounded, American employers added 22.8 million jobs over 10 years – a victory for all who have experienced the Great Recession.

Now, the coronavirus pandemic is stinging not only because of the public health crisis it has inflicted – but also because it has wiped out almost all of that decade of job gains in just two months.

The unemployment rate climbed to 14.7% in April, its highest level since the BLS began recording the monthly rate in 1948. The last time American unemployment was as severe was the Great Depression: the unemployment rate peaked at 24.9% in 1933, according to historic annual BLS estimates.

By all accounts, it has been two devastating months for American workers.

How we got here

In late March, state and local governments issued home stay orders to slow the spread of the coronavirus. Businesses suddenly shut down en masse, laying off or laying off millions of workers.

Government employment report shows some of the largest job losses in recreation and hospitality, which lost 7.7 million jobs, and retail, which lost 2.1 million jobs.

Although hospitals have struggled to cope with an influx of patients, health workers have also suffered layoffs, as ambulatory services like doctors and dentists cut 1.2 million jobs in April.

Food and beverage stores, which were also essential during the crisis, lost 42,000 jobs.

And as terrible as these numbers are, they don’t tell the whole story.

The employment figures come from a survey of employers and do not include independent contractors like Uber and Lyft drivers in the economy of concerts.

Likewise, the unemployment rate, which comes from a household survey, probably also underestimates the number of unemployed Americans.

People are only counted as “unemployed” by the BLS when they have been unemployed but have actively sought new work in the previous four weeks. Or, if it was a “temporary layoff” hoping to be rehired within six months. About 18 million people were counted as “temporarily unemployed” in April, up from just 1.8 million the previous month.

But much of the country is still under house arrest, so many of the workers who were laid off were not looking for new jobs in April. Instead of being considered “unemployed”, these people have been classified as having left the workforce. The employment-to-population ratio, which measures the share of the US population over the age of 16 who are employed, fell to 51.3% in April from 60% in March.

Economists expect that many people will be able to find work as businesses gradually reopen, but it could take months, if not years, for the labor market to regain its strength before the pandemic.

Training effects

Historically, the most disruptive aspect of recessions has been that jobs disappear and it takes years for companies to create new ones, said Adam Ozimek, chief economist at Upwork, a website that connects companies and the self-employed. This dynamic may be different in the coronavirus recession, where the optimistic outlook is that many, but not all, jobs will rebound.

The leisure and hospitality sectors may take longer to recover, as social distancing policies have destroyed business models.

Barbara Hull, 38, was a waiter at Caesar’s Palace in Las Vegas until March 18, when the lockout started. “We all knew it was going to happen,” she said.

“Financially, it’s scary for us [servers]because when we go back we don’t know what we’re going back to, “she said of the reopening of the economy. “The purpose of Vegas is to bring people together for this experience, and we don’t” I don’t know how long it will take before we get back to it. “

She can’t imagine it will be the same experience with servers like her wearing face masks, she said.

Economists also question whether consumers will feel comfortable returning to restaurants or traveling after the restrictions are lifted. For people like Hull, this could mean less work and much lower advice after reopening. Prudent consumer behavior could delay an economic recovery.

“You are going to see a lower demand for jobs that involve a lot of face to face interaction,” said Ozimek, adding that jobs that can be done remotely will be relatively safer throughout the crisis.

But experts are also worried about a second wave of Covid-19 infections in the second half. A resurgence of cases could lead to a resumption.

It’s also a scary world for recent graduates looking for work during the crisis.

Micaela Stoia, 22, of Oxnard, Calif., Was released from her dog training position with Petco when the lockout started. She applied for unemployment benefits, but has still not received any money. Stoia studied political science at university and has aspirations to eventually work in government.

“By the time I am 26 I will need a stable job with good benefits,” she said. “I have type I diabetes and I need these health benefits. I worked to achieve this goal, but the pandemic put a stop to it. ”

“It’s a bit difficult to get started if I only have my degree and no experience,” she added. “No one is hiring for internships. “

Ozimek predicts that local and state government jobs may be the next to be laid off. Various municipalities have already had to fire workers. Dayton, Ohio, for example, has laid off a quarter of its workforce, and Detroit is looking to lay off part-time workers to finance its multi-million dollar budget deficit.

Governments Respond

Comparisons to the Great Depression may seem disastrous, and although the crisis in the use of coronaviruses is historically deep, economists do not predict that it will be as severe as the economic slowdown of the 1930s. The Great Depression lasted 12 years and the United States had no social safety net at the time.

In the current crisis, the government has acted quickly to increase unemployment benefits, extend funding to businesses, and send stimulus checks to people earning less than $ 99,000 a year. While these programs are far from perfect, they still provide much-needed relief to some workers and employers.

In response to the pandemic, Congress expanded unemployment benefits to include an additional $ 600 per week up to four months.

It also expanded the number of people who can apply for unemployment benefits to include entrepreneurs, the self-employed and workers in the concert economy. But many states have struggled to cope with the sudden onset of unemployment claims.

New York Governor Andrew Cuomo said in April that the state had hired an additional 1,000 people just to handle the claims. In neighboring New Jersey, Governor Phil Murphy was looking for volunteers who know the decades-old COBOL computer programming language because many state systems still run on older mainframe computers.

And the backlog has not helped people get their benefits in a timely manner. In late April, Florida reported that the state had paid less than a quarter of claims filed since mid-March, for example.

It will take time for the US job market to recover from this unprecedented move. Federal Reserve Chairman Jerome Powell said last week that it would take a while for America to return to its historically low unemployment rate in February.

– Tami Luhby and Katie Lobosco contributed to this report.


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