Jobless rate spikes to 14.7%, highest since Great Depression

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An ironworker works at a high rise building construction site, Thursday, May 7, 2020, in the SoHo neighborhood of the Manhattan borough in New York. The U.S. government is poised to report the worst set of job numbers since record-keeping began in 1948, a stunning snapshot of the toll the coronavirus has taken on a now-shattered economy. (AP Photo/Mary Altaffer)

WASHINGTON – The U.S. unemployment rate hit 14.7% in April, the highest rate since the Great Depression, as 20.5 million jobs vanished in the worst monthly loss on record. The figures are stark evidence of the damage the coronavirus has done to a now-shattered economy.

The losses, reported by the Labor Department Friday, reflect what has become a severe recession caused by sudden business shutdowns in nearly every industry. Nearly all the job growth achieved during the 11-year recovery from the Great Recession has now been lost in one month.

The report indicated that a clear majority of April's job losses — roughly 75% — are considered temporary, a result of businesses that were forced to suddenly close but hope to reopen and recall their laid-off workers. Whether most of those workers can return to their jobs anytime soon, though, will be determined by how well policymakers, businesses and the public manage their response to the public health crisis.

The collapse of the job market has occurred with stunning speed. As recently as February, the unemployment rate was a five-decade low of 3.5%, and employers had added jobs for a record 113 months. In March, the unemployment rate was just 4.4%

The jump in the unemployment rate didn't capture the full devastation wrought by the business shutdowns. The Labor Department said its survey-takers erroneously classified millions of Americans as employed in April even though their employers have closed down. These people should have been classified as on temporary layoff and therefore unemployed. If they had been counted correctly, the unemployment rate would have been nearly 20%, the government said.

President Donald Trump, who faces the prospect of high unemployment rates through the November elections, said the figures were “no surprise."

“What I can do is I’ll bring it back,” Trump said. "Those jobs will all be back, and they’ll be back very soon. And next year we’ll have a phenomenal year."

But economists increasingly worry that it will take years to recover all the jobs lost. The nonpartisan Congressional Budget Office expects the jobless rate to be 9.5% by the end of 2021.