The unemployment rate has increased by over 10% since March, a devastating jump after the coronavirus and weeks-long government shutdowns pushed tens of millions of Americans onto unemployment rolls.
The unemployment rate measured 14.7% in April, according to data released by the Department of Labor on Friday. The March jobs report released last month, which barely caught the initial surge in unemployment as the coronavirus outbreak spread, measured at just 4.4%.
The U-6 unemployment rate, which includes so-called discouraged workers that are not actively looking for employment, rose to 22.8%, roughly five points above the 17.2% it measured at the height of the Great Recession. The U-6 number would include workers that are not looking for work in the middle of the pandemic because widespread company hiring freezes, or because they are afraid of returning to work and exposing themselves to the virus.
Leisure and hospitality businesses took the hardest hit, losing 7.7 million jobs as numerous restaurants and cafés were ordered to restrict their business operations and movie theaters, sports, and other places of entertainment were ordered closed. Education and health services also suffered major losses as medical professionals, such as dentists, were ordered to freeze elective surgeries and operations and parents pulled their children out of schools and daycares.
Economists surveyed by The Wall Street Journal expected the unemployment rate to hit around 16%, while some predicted it could rise as high as 25%, the peak during the Great Depression. No matter the exact rate, experts widely agree that the economic damage done in less than two months because of the coronavirus has been severe and will have serious long-term implications.
“We have to be utterly realistic about this because there is political fantasy out there and then there is economic reality,” RSM chief economist Joseph Brusuelas told Politico before the jobs report was released. “It is going to be years before we recover all of these lost jobs and as much as 25 percent of them aren’t ever coming back.”
“[The] next step is to discover if we suffered a fundamental economic break that is permanent. And it would appear the answer to that is yes,” Brusuelas added.
On Thursday, the Labor Department reported that 3.2 million more Americans had filed for unemployment. The total number of workers who have filed for unemployment since mid-March has reached over 33 million.
State governments initiated widespread shutdowns in March to slow the spread of the coronavirus. Governors declared states of emergency and ordered all businesses deemed “nonessential” to close while the federal government began passing relief packages worth trillions of dollars.
In late April, a handful of states began lifting heavy-handed restrictions on businesses and individuals in an effort to blunt the record job loss that swept the United States in a matter of weeks. Governors were pushed to lift orders by thousands of protesters struggling to pay bills and feed families as the lockdowns drug on. Many people committed acts of civil disobedience such as opening their businesses in violation of shutdown orders or gathering in public places closed off by authorities.
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