Coronavirus, State of the Labor Market

April 2020 Jobs Report: Historic Devastation

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The US economy lost 20.5 million jobs last month, and the unemployment rate is at 14.7%, up from 4.4% in March.

The coronavirus has devastated the US labor market, causing a shock historic in both its depth and breadth. The job gains of the past decade have been wiped away, and no major industry was spared. An unemployment rate seemingly transported from the Great Depression fails to capture the full extent of the sudden rise in joblessness. With today’s report, the full scope and scale of the current labor market crisis is only now coming into focus.

The number of workers who swiftly lost work in April is beyond belief. The share of people in their prime-working years with a job dropped to 69.7%, a rate not seen since November 1975. The rate of full-time work in the labor market fell to 44% while the rate of involuntary part-time work rose to 6.9%. 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.

Job loss was felt across almost every industry, but the pain was not felt evenly. Since February, leisure and hospitality sector employment has fallen at a -98.1% annualized rate. Approximately 62% of the drop in employment in April happened in low-paid industries.  

The entire rise in the unemployment rate is due to temporary layoffs, which means there’s a hope that these workers could be quickly recalled by their former employers. But for now, it’s just hope. 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 US labor market, and the destruction is still ongoing.

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