The leisure and hospitality industry, which includes restaurants and bars, lost 7.7 million jobs.
(CN) — With the coronavirus pandemic unleashing historic devastation on the U.S. economy, 20.5 million jobs were lost in April and the unemployment rate skyrocketed to 14.7%.
Both numbers are the worst the government has reported in the post-World War II era and show that nearly all of the gains made in the 11-year recovery after the Great Recession have been wiped away.
The unemployment rate is the worst since the Great Depression, when an estimated 24% of people were out of work, and the highest since the government began official tracking the numbers in 1948.
The Labor Department report released Friday is the first to show the full economic damage caused by the Covid-19 crisis. By comparison, a revised 870,000 jobs were lost in March, when the pandemic first began shutting down the economy.
Elise Gould, senior economist at the nonprofit think tank Economic Policy Institute, said payroll employment “dropped like a rock in April.”
“I struggle to even put into words how large this drop is,” she said. “Total job losses over the last two months would fill all 30 currently empty Major League Baseball stadiums 16 times over.”
The leisure and hospitality industry, which includes restaurants and bars, lost 7.7 million jobs last month as governors nationwide issued stay-at-home-orders.
Employers cut 2.5 million jobs in education and health services while professional and business services shed 2.1 million positions, as did the retail sector. The manufacturing industry saw a loss of 1.3 million jobs in April.
“It’s as if all the jobs in all of the states beginning with the letter ‘M’ simply disappeared in the last month,” Gould said. “That’s all the jobs in Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, and Montana combined.”
President Donald Trump said in an interview on “Fox & Friends” on Friday morning that the losses were anticipated.
“It’s fully expected – there’s no surprise, everybody knows that,” Trump said. “What I can do is bring it back.”
Nick Bunker, an economist at Indeed Hiring Lab, said the level of job loss in April “is beyond belief.”
“The unemployment rate hit a new all-time high, but that understates newly jobless workers, as 35.1% of job losers moved directly out of the labor force,” he said.
He said there is some glimmer of hope, because the jobless rate is tied to temporary layoffs and many of those employees could be quickly brought back to work.
“But for now, it’s just hope,” Bunker said. “Weekly unemployment insurance claims are still tracking in the millions, job postings on Indeed are nearly 40% lower than they were at this time last year, and, most importantly, the coronavirus is not yet under control. A cataclysm has hit the U.S. labor market, and the destruction is still ongoing.”
Paul Ashworth, chief U.S. economist at Capital Economics, noted that the true unemployment rate is actually higher than 14.7% because the Labor Department had some problems with classifying workers.
Friday’s report states some employees were listed as absent from work due to “other reasons” instead of unemployed on temporary layoff.
“Without that distortion, the unemployment rate would have been close to 20% last month,” Ashworth said.
Despite the massive job losses, the Dow Jones Industrial Average, S&P 500 and Nasdaq all saw modest gains Friday morning.
Before the pandemic brought the world to a standstill, the U.S. economy added a revised 230,000 jobs in February as a record growth streak continued into its 11th year.
At the start of the new year, economists predicted economic growth of about 1.7% in 2020, down from the 2.3% annual increase in the gross domestic product last year. But after Covid-19 hit the U.S., the Congressional Budget Office estimated a 12% drop in GDP for the second quarter alone. The national budget deficit is also expected to grow to $3.7 trillion this year.