Takeaways from the worst jobs report in US history
BALTIMORE (AP) — Brutal. Horrific. Tragic.
Choose your description. The April jobs report showed, in harrowing detail, just how terribly the coronavirus outbreak has pummeled the U.S. economy. Most obviously, there’s the 14.7% unemployment rate, the highest since the Great Depression. And the shedding of more than 20 million jobs, by far the worst one-month loss ever.
But Friday’s jobs report from the government contains 42 pages about just how far the job market has tumbled, along with hints of what to watch for — eventually — in a possible recovery.
Here are 10 major takeaways from the April jobs report:
EVEN WORSE THAN IT LOOKS. REALLY.
The unemployment rate is catastrophically bad. Based on backdated estimates, the rate hasn’t been higher since 1939. But the scary thing is that the April figure actually downplayed how bleak things are.
Heidi Shierholz, the former chief economist for the Labor Department, noted on that 6.4 million people who were out of work in April didn’t look for a job and so weren’t even counted as unemployed. Include them and the unemployment rate jumps to roughly 19%, she tweeted.
An additional 7.5 million workers appear to have been mistakenly classified as “employed, not at work” when they were actually jobless last month and should have been counted as unemployed, said Shierholz, who now works at the liberal Economic Policy Institute. Add them into the mix and the unemployment rate screeches up to 23.6% — not far below the all-time unemployment peak of roughly 25% from 1933.
WORKERS STILL HOPEFUL
Of the roughly 20.6 million people who lost jobs in April, roughly three-fourths described their unemployment, perhaps optimistically, as “temporary.” This means that more than 18 million Americans expect to return to their workplaces soon. Even if they all regained their jobs quickly — something almost no one expects — the unemployment rate would likely dip below 10% but still remain high.
Most economic forecasts expect any rebound to be much slower than the coronavirus-induced collapse, which arrived suddenly and violently. Temporary layoffs could quickly become permanent. Major stores such as Neiman Marcus and J.Crew have filed for bankruptcy protection. Restaurants deprived of revenues are starting to announce permanent closures. The Congressional Budget Office estimates that the unemployment rate will be 11.7% in the final three months of this year, an indication that many jobs will not return by then.
COLLEGE PAYS OFF
College graduates were far more likely to keep their jobs in April. Their unemployment rate was 8.4%. That’s still high, but it’s significantly lower than the national average of 14.7%. People with college and advanced degrees entered the recession with a big advantage: They held jobs that made it easier to work from home.
The Bureau of Labor Statistics reported that 41.7% of people with an advanced degree worked from home on an average day in 2018. And slightly more than a third of people with a college degree did so. But just 11.9% of high school graduates worked from home. That limitation made them more vulnerable to layoffs.