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US unemployment rate reaches Great Depression-era level
Washington, May 9, 2020
US employers have cut a staggering 20.5 million jobs in April amid the COVID-19 pandemic, erasing a decade of job gains since the global financial crisis and pushing the unemployment rate to a record 14.7 per cent, which is the highest level since the Great Depression.
In April, the unemployment rate surged by 10.3 percentage points to 14.7 per cent, the largest over-the-month increase in the history of the series dating back to January 1948, the Bureau of Labor Statistics (BLS) said in a report on Friday.
Since mid-March, numerous US states have rolled out "stay-at-home" policies and shut down non-essential businesses in a bid to slow the spread of the virus, leading companies to cut millions of jobs in weeks.
Employment in leisure and hospitality plummeted by 7.7 million, or 47 per cent, the report showed.
Almost three-quarters of the decrease, or 5.5 million, occurred in food services and drinking places.
The manufacturing sector shed 1.3 million workers, and employment in retail trade was down 2.1 million jobs.
The education and health sector, which is a reliable job creator during "normal" times, lost 2.5 million jobs.
Government employment also dropped by 980,000 in April, according to the Bureau. Employment in local government was down by 801,000, in part reflecting school closures.
Hispanics and African-Americans have been hit the hardest in the job crisis, said the BLS report.
Data showed that the unemployment rate in April jumped to 18.9 per cent for Hispanics, 16.7 per cent for African-Americans, 14.5 per cent for Asians and 14.2 per cent for whites.
Average hourly earnings in April increased by 1.34, or 4.7 per cent, to $30.01, the report showed.
The new unemployment data came a day after the Bureau reported that the number of initial unemployment claims totalled nearly 3.2 million last week.
In the prior week, the figure reached 3.8 million.
The BLS report also showed that the labor force participation rate dropped by 2.5 percentage points over the month to 60.2 per cent, the lowest rate since January 1973, when it was 60 per cent.
Meanwhile, White House economic advisor Kevin Hassett had recently said that every US state will mostly reopen by the end of May, and most forecasters predict an economic rebound in the second half of the year.
President Donald Trump on Friday told Fox News that with the reopening of the economy, lost jobs will come back.
"Those jobs will all be back, and they'll be back very soon," the President said.
But analysts said it could take years to return to the historically low 3.5 per cent unemployment rate the country experienced before the pandemic.
Since September last year, the unemployment rate had been hovering around 3.5 per cent to 3.6 per cent until February.