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US unemployment rate soars to 14.7 percent as economy loses 20.5 million jobs
BY SYLVAN LANE - 05/08/20 08:32 AM EDT
Soure:https://thehill.com/policy/finance/496723-us-unemployment-rate-spikes-to-14.7-percent
The U.S. lost 20.5 million jobs in April amid the economic devastation of the coronavirus pandemic as the steepest recorded surge in American unemployment nearly wiped out a decade of job gains, according to data released Friday by the Bureau of Labor Statistics (BLS).
The unemployment rate spiked to 14.7 percent from 4.4 percent in March, according to the April jobs report, as thousands of businesses closed and laid off or furloughed workers they could no longer afford to employ. The one-month rise in the unemployment rate between March and April is the largest ever recorded by the BLS.
April’s staggering job losses also shattered records for both the largest one-month decline in jobs — roughly 2 million in September 1945 — and the highest level of unemployment ever recorded by the BLS, 10.8 percent in November 1982.
The jobs lost in April alone are almost 2.5 times the 8.7 million jobs lost during the Great Recession and nearly equal to the 22.4 million jobs gained in the decade of recovery that followed.
Between March’s revised loss of 870,000 jobs and April’s record-breaking plunge, the U.S. has lost roughly 21.4 million jobs since the spread of COVID-19 upended American life and derailed a resilient economy.
While 18.1 million of the 20.5 million jobs lost in April were due to temporary layoffs, according to the BLS, the steep economic toll of the pandemic may force many of those employers to close for good.
“Unfortunately, for many of those in the job market, the question becomes whether these jobs will return and these businesses reopen, which could have devastating and far-reaching economic effects,” wrote Beth Ann Bovino, chief U.S. economist at S&P Global Ratings, in a Thursday research note.
Bovino estimated that 90 percent of the U.S. population has been forced to live under some form of stay-at-home order as state and local governments take desperate measures to slow the spread of COVID-19.
The first stages of the U.S. coronavirus outbreak in early March prompted a wave of event cancellations, travel restrictions and postponements that dampened the strong American economy. Unemployment had settled at a 50-year low of 3.5 percent at the start of the year, and the emergence of COVID-19 appeared to be a serious but fleeting obstacle.
Even so, a massive shortfall in coronavirus tests made containing the outbreak effectively impossible, prompting government officials to close or restrict nonessential businesses and buy time for a surge in COVID-19 cases. While the restrictions were likely crucial to slowing the pandemic, they did so at a dire economic cost.
The leisure and hospitality sector took the brunt of April’s damage, losing 7.7 million jobs as employment in the industry dropped 47 percent. A 5.5 million decline in restaurant and bar jobs made up most of the April plunge.
The pandemic wiped out 2.5 million education and health services jobs in April, including 503,000 losses in dental offices, 243,000 losses in physicians’ offices and 651,000 social assistance jobs.
Government employment also sunk by 980,000 jobs, including the loss of 801,000 jobs in local government that reflects widespread school closures. The sharp decline in government jobs come as states and municipalities face severe budget shortfalls driven by rising unemployment claims and falling tax revenue.
While the U.S. lost 2.1 million retail jobs in April, warehouse clubs and supercenters gained 93,000 workers. Professional and business services (2.1 million), manufacturing (1.3 million) and other services (1.3 million) also suffered seven-figure job losses.
“Although the ‘recession’ is only weeks old, the size of the labor market decline has been unprecedented,” wrote economists from the Federal Reserve, University of Chicago and ADP in a paper published Wednesday.
The economists also noted that an “alarming” 40 percent of furloughs and 16 percent of layoffs from private payrolls as of April 18 were due to businesses closing either temporarily or, perhaps unknowingly, for good.
“One would hope that many of the businesses we observe suspending activities will resume operations in the near future. If not, the jobs destroyed by exiting businesses are permanently gone, requiring extra growth among surviving businesses or extra business entry to replace them,” they wrote.
Those pandemic-driven business closures forced more than 33 million Americans to apply for unemployment benefits since mid-March, according to the Labor Department.
To cushion the blow, the federal government expanded and supplemented unemployment insurance through the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act enacted in March. But the record-breaking crush of unemployment claims overwhelmed teetering and outdated state systems, forcing millions of jobless Americans to wait weeks for their benefits.
“We're looking at a system that people don't pay attention to until there's a crisis, and the crisis came on so quickly this time that there is absolutely no way any of these systems were going to be able to process benefits quickly,” said Michele Evermore, senior policy analyst at the National Employment Law Project.
Evermore warned that the lags disbursing unemployment benefits could force some of the most vulnerable Americans into deeper financial trouble, particularly wage-earners who lack the financial flexibility to weather the crisis.
“People who didn't make much to begin with probably don't have access to any other kind of credit,” she said. “I don't know how these people are getting by.”
April's crushing jobs report comes as the Trump administration and lawmakers squabble over the design and passage of another sprawling relief bill. Trump has voiced confidence that the U.S. economy will quickly rebound and brushed off the record-breaking job losses during a Friday interview with Fox News.
“It’s fully expected. There’s no surprise," Trump said in a phone interview on "Fox & Friends" shortly after the report was released.
“Even the Democrats aren’t blaming me for that," Trump added, pledging to bring back the jobs lost to the pandemic.
Despite Trump's claim, a slew of Democratic lawmakers have tied the devastating toll of the pandemic to the president's early dismissal of its danger and lagging response.
“In two months, almost a decade’s worth of job growth has been wiped out, the unemployment rate has more than quadrupled, and more than 75,000 Americans have died because President Trump did not take seriously multiple early warnings about the global threat of the coronavirus and failed to lead a competent fight against it," said Rep. Don Beyer (D-Va.), vice chairman of the Joint Economic Committee, in a Friday statement.
Updated at 9:26 a.m. Morgan Chalfant contributed.
BY SYLVAN LANE - 05/08/20 08:32 AM EDT
Soure:https://thehill.com/policy/finance/496723-us-unemployment-rate-spikes-to-14.7-percent
The U.S. lost 20.5 million jobs in April amid the economic devastation of the coronavirus pandemic as the steepest recorded surge in American unemployment nearly wiped out a decade of job gains, according to data released Friday by the Bureau of Labor Statistics (BLS).
The unemployment rate spiked to 14.7 percent from 4.4 percent in March, according to the April jobs report, as thousands of businesses closed and laid off or furloughed workers they could no longer afford to employ. The one-month rise in the unemployment rate between March and April is the largest ever recorded by the BLS.
April’s staggering job losses also shattered records for both the largest one-month decline in jobs — roughly 2 million in September 1945 — and the highest level of unemployment ever recorded by the BLS, 10.8 percent in November 1982.
The jobs lost in April alone are almost 2.5 times the 8.7 million jobs lost during the Great Recession and nearly equal to the 22.4 million jobs gained in the decade of recovery that followed.
Between March’s revised loss of 870,000 jobs and April’s record-breaking plunge, the U.S. has lost roughly 21.4 million jobs since the spread of COVID-19 upended American life and derailed a resilient economy.
While 18.1 million of the 20.5 million jobs lost in April were due to temporary layoffs, according to the BLS, the steep economic toll of the pandemic may force many of those employers to close for good.
“Unfortunately, for many of those in the job market, the question becomes whether these jobs will return and these businesses reopen, which could have devastating and far-reaching economic effects,” wrote Beth Ann Bovino, chief U.S. economist at S&P Global Ratings, in a Thursday research note.
Bovino estimated that 90 percent of the U.S. population has been forced to live under some form of stay-at-home order as state and local governments take desperate measures to slow the spread of COVID-19.
The first stages of the U.S. coronavirus outbreak in early March prompted a wave of event cancellations, travel restrictions and postponements that dampened the strong American economy. Unemployment had settled at a 50-year low of 3.5 percent at the start of the year, and the emergence of COVID-19 appeared to be a serious but fleeting obstacle.
Even so, a massive shortfall in coronavirus tests made containing the outbreak effectively impossible, prompting government officials to close or restrict nonessential businesses and buy time for a surge in COVID-19 cases. While the restrictions were likely crucial to slowing the pandemic, they did so at a dire economic cost.
The leisure and hospitality sector took the brunt of April’s damage, losing 7.7 million jobs as employment in the industry dropped 47 percent. A 5.5 million decline in restaurant and bar jobs made up most of the April plunge.
The pandemic wiped out 2.5 million education and health services jobs in April, including 503,000 losses in dental offices, 243,000 losses in physicians’ offices and 651,000 social assistance jobs.
Government employment also sunk by 980,000 jobs, including the loss of 801,000 jobs in local government that reflects widespread school closures. The sharp decline in government jobs come as states and municipalities face severe budget shortfalls driven by rising unemployment claims and falling tax revenue.
While the U.S. lost 2.1 million retail jobs in April, warehouse clubs and supercenters gained 93,000 workers. Professional and business services (2.1 million), manufacturing (1.3 million) and other services (1.3 million) also suffered seven-figure job losses.
“Although the ‘recession’ is only weeks old, the size of the labor market decline has been unprecedented,” wrote economists from the Federal Reserve, University of Chicago and ADP in a paper published Wednesday.
The economists also noted that an “alarming” 40 percent of furloughs and 16 percent of layoffs from private payrolls as of April 18 were due to businesses closing either temporarily or, perhaps unknowingly, for good.
“One would hope that many of the businesses we observe suspending activities will resume operations in the near future. If not, the jobs destroyed by exiting businesses are permanently gone, requiring extra growth among surviving businesses or extra business entry to replace them,” they wrote.
Those pandemic-driven business closures forced more than 33 million Americans to apply for unemployment benefits since mid-March, according to the Labor Department.
To cushion the blow, the federal government expanded and supplemented unemployment insurance through the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act enacted in March. But the record-breaking crush of unemployment claims overwhelmed teetering and outdated state systems, forcing millions of jobless Americans to wait weeks for their benefits.
“We're looking at a system that people don't pay attention to until there's a crisis, and the crisis came on so quickly this time that there is absolutely no way any of these systems were going to be able to process benefits quickly,” said Michele Evermore, senior policy analyst at the National Employment Law Project.
Evermore warned that the lags disbursing unemployment benefits could force some of the most vulnerable Americans into deeper financial trouble, particularly wage-earners who lack the financial flexibility to weather the crisis.
“People who didn't make much to begin with probably don't have access to any other kind of credit,” she said. “I don't know how these people are getting by.”
April's crushing jobs report comes as the Trump administration and lawmakers squabble over the design and passage of another sprawling relief bill. Trump has voiced confidence that the U.S. economy will quickly rebound and brushed off the record-breaking job losses during a Friday interview with Fox News.
“It’s fully expected. There’s no surprise," Trump said in a phone interview on "Fox & Friends" shortly after the report was released.
“Even the Democrats aren’t blaming me for that," Trump added, pledging to bring back the jobs lost to the pandemic.
Despite Trump's claim, a slew of Democratic lawmakers have tied the devastating toll of the pandemic to the president's early dismissal of its danger and lagging response.
“In two months, almost a decade’s worth of job growth has been wiped out, the unemployment rate has more than quadrupled, and more than 75,000 Americans have died because President Trump did not take seriously multiple early warnings about the global threat of the coronavirus and failed to lead a competent fight against it," said Rep. Don Beyer (D-Va.), vice chairman of the Joint Economic Committee, in a Friday statement.
Updated at 9:26 a.m. Morgan Chalfant contributed.
