Coronavirus: Pandemic sends US jobless rate to 14.7%
The US unemployment rate has risen to 14.7%, with 20.5 million jobs lost in April, as the coronavirus pandemic devastated the economy. The rise means the jobless rate is now worse than at any time since the Great Depression of the 1930s. Since the pandemic began, the US has suffered its worst growth numbers in a decade and the worst retail sales report on record. Just two months ago, the unemployment rate was at 3.5%, a 50-year low.“It is historically unprecedented,” said economist Erica Groshen, former head of the government’s Bureau of Labor Statistics, who now teaches at Cornell University. “We have put our economy into a medically induced coma in order to heal it from the pandemic… and that has led to the most precipitous loss of jobs seen in any of the modern data.”The report from the Labor Department showed declines in every sector of the economy. Leisure and hospitality were hit especially hard, with payrolls falling by 7.7 million or 47%. Employers in education and health services cut 2.5 million positions, while retailers shed 2.1 million. The Labor Department said more than three-quarters of those without jobs described themselves as temporarily laid off, a sign that many of those currently without work is hopeful that the economy will be able to rebound. But economists warned that the pandemic is likely to force major changes to businesses – such as limits on how many people may be in a restaurant at one time – that could reduce the need for workers. And the longer the shutdown lasts, the more likely it is that a business will not survive.“Even a temporary layoff can turn into a permanent one if the business doesn’t survive or if the business has to change its business model so dramatically that it needs different numbers or a different kind of worker,” Ms. Groshen said. Statistics Canada estimated that about a third of the workforce was either out of work or working less than half of their usual hours.
In an appearance on the Fox News channel, US President Donald Trump shrugged off the 20.5 million jobs lost in the US as “totally expected” and “no surprise”.“Even the Democrats aren’t blaming me for that. What I can do is I can bring it back,” he said as the figures were released. But bankruptcies have already claimed retailers such as J Crew and Neiman Marcus, as well as many firms in the energy sector, where a collapse in oil prices, due in part to a pandemic-related drop in demand, has worsened the strains.
