The U.S. economy shed more than 20 million jobs in April and the unemployment rate shot up to its highest level in the post-war era as the coronavirus pandemic of 2020 abruptly cut the livelihoods of millions of Americans and forced them to stay at home.
The U.S. Bureau of Labor Statistics reported on Friday that 20.5 million Americans lost their jobs in April, pushing the unemployment rate up to 14.7%, blowing past the previous record rate of 10.8% back in 1948 as employers from Wall Street to Main Street to the local mall cut positions and furloughed staff.
The numbers, which were better than Wall Street’s dire forecasts of 22 million lost jobs, still eclipsed the previous record of 1.96 million jobs lost in 1945 at the end of World War II, when factories churning out machinery and materials for the war effort closed their doors.
March's initial tally of 701,000 lost jobs was revised higher to 870,000.
The staggering job losses and record-high unemployment mark a jarring pivot from just a few months ago, when the economy was pumping out hundreds of thousands of new jobs on a monthly basis, and joblessness was hovering near 50-year lows.
“This is easily one of the most harrowing pieces of economic data ever to have been published," said Ayush Ansal, chief investment officer at Crimson Black Capital. "The Covid-19 pandemic has simply pulverized the world's largest economy."
While deep and extensive, the damage recorded by the Labor Department was only up to mid-April and likely missed a wide swath of reporting as states scurried to record official job losses and related claims.
Another component that makes the figures even more difficult to analyze is the sheer number of Americans who most likely stopped looking for work - either because they were worried about exposing themselves to the virus or, more likely, presumed companies and entire industries were not looking to hire.
Indeed, a more encompassing measure that includes those who have stopped looking for work as well as those holding part-time jobs for economic reasons also hit an all-time high of 22.8%, the government said. The jump in the “real” unemployment rate reflected a plunge in the labor participation rate to 60.7%, its lowest level since 1973.
The unprecedented jump in joblessness came largely due to part-time layoffs. Those who said they lost their jobs temporarily surged 10-told to 18.1 million, while those reporting permanent losses more than tripled, from 544,000 to 2 million, the report said.
Full-time workers fell by 15 million for the month while part-timers plunged by 7.4 million.
To be sure, there were some silver linings in the report, in particular the fact that a large percentage of both March and April's dramatic unemployment numbers came from workers on temporary furloughs, not permanent layoffs.
Nonetheless, economists and experts are divided on how the numbers will pan out going forward, particularly because of the rapid shifts in how companies have responded to cutting jobs, how the government has measured and tallied those numbers – and also how quickly companies might begin re-hiring again once the pandemic subsides.
"The historic devastation to the labor market happened almost overnight, but it looks like it’s going to take a considerably long time to get back on track," said E*TRADE Financial Managing Director of Investment Strategy Mike Loewengart.
"Donald Trump and the U.S. Federal Reserve are facing their Everest, and have a phenomenal challenge ahead to restore the economy to some level of normality," said Crimson Black Capital's Ansal.
“Markets knew this was coming but it will still go down as the darkest day in the country's economic history."