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The numbers: The coronavirus pandemic destroyed a massive 20.5 million jobs in April, driving the unemployment rate to a post Word War Two high of 14.7% as the United States faced its biggest economic crisis in almost a century.
The devastating trail of job losses was heaviest at retailers, restaurants, hotels and manufacturers, but every major industry suffered. The health-care sector even lost 1.4 million jobs amid the worst health crisis in American history, according to government figures released Friday morning.
The unemployment rate leaped to double digits from a 50-year low of just 3.5% two months ago, but the share of idled workers is almost certainly higher. A broader measure of unemployment that includes discouraged jobseekers and other people on the fringes of the labor market skyrocketed to a record 22.8%.
In seven weeks since the virus shut down much of the U.S. economy, more than 33 million people have applied for unemployment benefits. The numbers are still growing by several million a week.
Read:Jobless claims jump 3.2 million in early May, but historic rate of layoffs is slowing
A smattering of people have been returning to work in dribs and drabs over the past few weeks as states slowly reopen their economies, but not enough to put an appreciable dent in record unemployment.
Before the April employment report, premarket trading pointed to a higher opening for the stock market. The loss of jobs was a bit less the 22.1 million forecast of economists surveyed by MarketWatch.
What happened: Hotels and restaurants were ravaged by fear of the virus and the resulting shutdowns. They cut 7.6 million jobs, at least temporarily, as Americans stayed home.
Most retailers were also slammed, especially those without a strong online presence, as walk-in traffic dried up. Retail employment fell by 2.1 million.
The health-care industry, where employment has been growing for decades, was a surprising victim as well. Nearly 1.5 million jobs in the medical profession were scrubbed as patients avoided hospitals and elective procedures were put off.
Manufacturers,, meanwhile, loss 1.3 million jobs and construction companies slashed employment by almost 1 million.
In an odd quirk, the average of amount of money workers earn per hour surged by 1.34 to $30.01. The increase reflects a greater percentage of job losses among lower-wage workers than higher-earning ones. The pandemic has been especially harmful to Americans of modest means, particularly those who work in service-oriented industries.
Although the April employment report paints an ugly picture of the U.S. labor market, the devastation probably runs even deeper than the official statistics show.
For one thing, some of the people who are still getting paid by their companies but aren’t working probably aren’t included in the jobless rate. Others have stopped looking for work and dropped out of the labor force because they’re aren’t any jobs. They wouldn’t be counted in the official jobless rate, either. And with many companies closed or going out of business, the response rate to the government’s survey is lower than usual
A better illustration of the havoc is evident in the so-called U6 unemployment rate that tries to capture a fuller scope of who’s working and who’s not. After sinking to the lowest level on record low of 6.7% at the end of last year, the rate soared to nearly 23% in April. That suggests one in four Americans is either unemployed or underemployed — an astonishing number that harkens back to the Great Depression some 90 years ago.
Although the government didn’t keep records back then, economic historians estimate unemployment peaked at 25% in 1933.
Read:The record number of people applying for jobless benefits is even worse than it looks
Big picture: The U.S. has already sunk into a deep recession. Many states are trying to restart their economies with the encouragement of the Trump administration to try to limit the damage and prevent the job losses from becoming permanent.
Yet these efforts could founder if the coronavirus begins to spread rapidly again. The lack of a vaccine or other treatments could also force Americans to practice social distancing for the foreseeable future. Such a major change in behavior would slow a U.S. recovery by making it hard for many businesses in key parts of the economy such as travel, leisure, sports and entertainment to return to normal.
Read:Why the economy’s recovery from the coronavirus is likely to be long and painful
Market reaction:The Dow Jones Industrial Average DJIA, +0.89% and S&P 500 SPX, +1.15% were set to open in Friday trades. Stocks have rallied in fits and starts over the past week on the hopes that the economy will continue to reopen. Many states have slowly begun to relax restrictions.
