The April jobs report was by far the worst in U.S. history.
Employment, as measured by a survey of establishments that goes back to 1939, fell by 20.5 million, easily surpassing the previous all-time high of 1.959 million jobs lost in one month in 1945, after the end of World War II. Job losses in March were revised from a loss of 701,000 to a loss of 870,000. During the Great Recession in 2007 to 2009, the biggest month of job losses was 800,000, and total job losses were 8.7 million. Thus, after just two months, job losses of 21.4 million during the Viral Recession have more than doubled those during the two years-plus during the Great Recession.The unemployment rate jumped to 14.7 percent in April from 4.4 percent in March and 3.5 percent in February. This is the biggest one-month increase in the unemployment rate in the history of the series, going back to 1948, and the highest unemployment rate ever, easily surpassing the 10.8 percent rate in 1982. The only comparable period is the Great Depression. Unemployment statistics from then are spotty, but on a comparable basis the unemployment rate likely hit 22 to 23 percent. In just two months the unemployment rate has gone from the lowest rate in 50 years to the highest rate in almost 90 years.
The consensus expectation was for a loss of 20 million jobs in April, with the unemployment rate rising to 15 percent.
The unemployment rate would have been even higher, but a whopping 6.4 million Americans dropped out of the labor force in April, meaning they were neither employed nor looking for work. The number of people employed in the household survey (different from the survey of establishments) fell by 22.4 million. The U-6 rate, which measures underemployment and discouraged workers as well, rose to 22.8 percent in April, from 8.7 percent in March.
The job losses were enormous across industries in April. Employment fell by 19.52 million in private industries, including 2.355 million in goods-producing industries and 17.165 million in private services-providing industries. There were job losses of 7.6 million in leisure/hospitality services as the coronavirus pandemic and restrictions on movement led to restaurant closures and a huge drop in travel. There were job losses between 2 and 3 million in professional/business services, retail trade, and healthcare, between 1 and 2 million in manufacturing and other services, and close to 1 million in construction. Government employment fell by 980,000 over the month.
This report was about as bad as was expected, and the May numbers are likely to be even worse as businesses continue to lay off workers; 3.17 million people filed initial claims for unemployment insurance in the week ending May 2. The labor market may get some relief over the next couple of months as businesses reopen as restrictions on movement are gradually lifted. With tax rebates and expanded unemployment insurance benefits, consumers have cash to spend, despite job losses. But if consumers are unwilling to venture out, that may not make a difference. PNC expects the unemployment rate to peak over the next few months, and job losses to end by mid-2020. But it will take a couple of years for employment to return to its pre-recession peak.
