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Thanks to the coronavirus crisis, the United States is now facing its highest unemployment rate since the Great Depression.
The economy shed 20.5 million jobs in April, and the official unemployment rate rose to 14.7 percent—its highest peak since the government began tracking the modern data series in 1948, the Bureau of Labor Statistics reported on Friday.
April’s numbers are more on par with the 1931 unemployment rate, based on data drawn from the Historical Statistics of the United States. For the moment, we’re living in Hooverville.
But today’s headline figure may understate the actual extent of joblessness at the moment. In a FAQ accompanying today’s report, the BLS explained that due to a data collection mistake, up to 8.1 million Americans may have been categorized as employed but not at work, when they likely should have been classified as unemployed or on a temporary layoff. If you factor those individuals in, the April unemployment rate would jump to about 19.5 percent, the government’s statisticians wrote. That would place us roughly in 1932 to 1933 territory.
If all this weren’t depressing enough for you, remember: Millions more Americans have filed unemployment claims since the middle of last month, when this data was actually collected. The picture we’re looking at now is still relatively bright compared to the current reality.
One notable thing about April’s job losses was that they occurred across virtually all industries. The largest chunk by far was in leisure and hospitality (including hotels and restaurants), which saw payrolls decline by more than 7.6 million, or more than one-third of the total. Retail contributed another 2.1 million. But basically every corner of the labor market—from construction to manufacturing to health care to professional services like law—saw declines. There were a handful sub-sectors that saw small increases, but the only big gains were supercenters and warehouse clubs (think Walmart, Target, and Costco). We’re not looking at a few industries that have frozen up, but really a whole economy.
It’s not exactly a shock that we’re facing mass unemployment at a moment when entire states and industries are effectively shut down. But the new jobless figures do suggest that the government’s coronavirus response has fallen short in at least one key way. Much of the economic relief bill Congress passed in March, the CARES Act, was designed to keep workers attached to their jobs where possible. The fact that we are now staring at Great Depression–like unemployment numbers anyway should be regarded as a failure. Yes, it’s likely that even more people would be out of work were it not for efforts like the Paycheck Protection Program. And it’s possible that there has been some rehiring as businesses received their government aid. But the continued flood of unemployment claims suggest that things are, if anything, getting worse rather than better.
The one reason these figures are not a complete catastrophe is that Congress created extremely generous $600-per-week federal unemployment benefits. As a result of those, many Americans will receive more in government aid each week than they were earning at their jobs. States have had difficulty coping with the avalanche of claims, and many people have had to wait weeks to receive their money, if they haven’t been prevented from applying entirely by crashing websites. But as of April 18, almost 19 million Americans at least had their applications processed. Hopefully, most of the jobless are actually receiving some substantial help by now.
The federal unemployment benefits are only scheduled to last through the end of July, however. If they expire and people still aren’t ready for a return to work (or shopping or eating out), families are going to find themselves in increasingly desperate financial situations, and the economy will likely sink further into trouble.
In the end, this is just one month’s jobs report. What made the Great Depression the Great Depression was the yearslong slog through economic devastation. The question for us is whether the government can finally contain this virus and engineer a reasonably fast economic recovery. Unfortunately, it’s not at all clear that it will. Republicans in Congress currently don’t appear to have much appetite to pass further significant relief or stimulus measures, such as fiscal aid to states; extended federal unemployment benefits; or a bigger, better wage subsidy program to keep people connected to their work. Meanwhile, the White House seems to betting its response on Jared Kushner’s ability to speed up development of a vaccine, which … God help us. If none of this changes soon, there’s a good chance we really will be headed for a long depression of our own.
While this is true, it's not as bad as the great depression because there are millions of jobs created with technology that isn't affected by this pandemic.
We have an invisible workforce right now that actually generates more GDP than manufacturing and retail. If it wasn't for technology it would be worst than the great depression.
Just about everyone I know is still working, busy than ever.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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I find it amazing that it's only 14.7%, with so many stores and restaurants being shut down, and it's only 4.7% more than in the 2008 recession. Must be a lot of small business owners not working that cannot file for unemployment so are not counted.
I find it amazing that it's only 14.7%, with so many stores and restaurants being shut down, and it's only 4.7% more than in the 2008 recession. Must be a lot of small business owners not working that cannot file for unemployment so are not counted.
The problem is people that cannot get through the logjam to register with their unemployment offices. The Fed (I think in Minneapolis) believes the true rate is 24-25%
Just about everyone I know is still working, busy than ever.
Yep... wife and I both are. I just put in 30 hours of OT in back to back weeks. I can't help but wonder how many of these 20 million jobs lost are cashiers at Taco Bell.
The only people I know that have lost their jobs are a couple high school teenager friends who work part time at Dominos... and when you factor in the $600 bonus UI they are making like 3x their weekly pay on unemployment. LOL
It will also be the quickest increase of employment ever after states open back up. People haven’t been allowed to leave their homes. Kind of hard to have a job if you can’t go anywhere don’t ya think?
I am middle-aged and got fed up with recessions. I graduated into one back in the early 90s. It was horrible. I had to live with my parents. Then the economy was booming in the late 90s. I had earned my first master's degree. I got raises, promotions, etc. very quickly. Then it all crashed in 2001. After 911 and the dot com bubble crashed, the IT job market was horrible in Denver. I had to move to FL.
By 2002 I had learned my lesson - the economy can be cruel and tailspin and crash into a recession very quickly. There one about every 8 to 12 years. It's like a gigantic, category 4 hurricane. You should always be preparing for the next one. So, I started earning multiple graduate degrees. People thought it was unorthodox - overkill in training. But I always knew another "big one" was coming - just like hurricanes. Eventually, the big one hits like Hurricane Michael hitting the FL Panhandle in 2018.
Most recently, I studied machine learning and artificial intelligence with Java and Python. Those skills are really helping me stay employed right now. Plus I have technical writing skills that are very uncommon with engineers - I actually excel at it. You can tell by the way I type a lot in my posts - lol. I am fast typist.
So, the economy is cruel - one should always be preparing for the next recession with training, savings, etc. The other "preparation" was that I did not get married. I am glad I avoided marriage in this recession and pandemic. It would make it that much harder.
Thanks to the coronavirus crisis, the United States is now facing its highest unemployment rate since the Great Depression.
The economy shed 20.5 million jobs in April, and the official unemployment rate rose to 14.7 percent—its highest peak since the government began tracking the modern data series in 1948, the Bureau of Labor Statistics reported on Friday.
April’s numbers are more on par with the 1931 unemployment rate, based on data drawn from the Historical Statistics of the United States. For the moment, we’re living in Hooverville.
But today’s headline figure may understate the actual extent of joblessness at the moment. In a FAQ accompanying today’s report, the BLS explained that due to a data collection mistake, up to 8.1 million Americans may have been categorized as employed but not at work, when they likely should have been classified as unemployed or on a temporary layoff. If you factor those individuals in, the April unemployment rate would jump to about 19.5 percent, the government’s statisticians wrote. That would place us roughly in 1932 to 1933 territory.
If all this weren’t depressing enough for you, remember: Millions more Americans have filed unemployment claims since the middle of last month, when this data was actually collected. The picture we’re looking at now is still relatively bright compared to the current reality.
One notable thing about April’s job losses was that they occurred across virtually all industries. The largest chunk by far was in leisure and hospitality (including hotels and restaurants), which saw payrolls decline by more than 7.6 million, or more than one-third of the total. Retail contributed another 2.1 million. But basically every corner of the labor market—from construction to manufacturing to health care to professional services like law—saw declines. There were a handful sub-sectors that saw small increases, but the only big gains were supercenters and warehouse clubs (think Walmart, Target, and Costco). We’re not looking at a few industries that have frozen up, but really a whole economy.
It’s not exactly a shock that we’re facing mass unemployment at a moment when entire states and industries are effectively shut down. But the new jobless figures do suggest that the government’s coronavirus response has fallen short in at least one key way. Much of the economic relief bill Congress passed in March, the CARES Act, was designed to keep workers attached to their jobs where possible. The fact that we are now staring at Great Depression–like unemployment numbers anyway should be regarded as a failure. Yes, it’s likely that even more people would be out of work were it not for efforts like the Paycheck Protection Program. And it’s possible that there has been some rehiring as businesses received their government aid. But the continued flood of unemployment claims suggest that things are, if anything, getting worse rather than better.
The one reason these figures are not a complete catastrophe is that Congress created extremely generous $600-per-week federal unemployment benefits. As a result of those, many Americans will receive more in government aid each week than they were earning at their jobs. States have had difficulty coping with the avalanche of claims, and many people have had to wait weeks to receive their money, if they haven’t been prevented from applying entirely by crashing websites. But as of April 18, almost 19 million Americans at least had their applications processed. Hopefully, most of the jobless are actually receiving some substantial help by now.
The federal unemployment benefits are only scheduled to last through the end of July, however. If they expire and people still aren’t ready for a return to work (or shopping or eating out), families are going to find themselves in increasingly desperate financial situations, and the economy will likely sink further into trouble.
In the end, this is just one month’s jobs report. What made the Great Depression the Great Depression was the yearslong slog through economic devastation. The question for us is whether the government can finally contain this virus and engineer a reasonably fast economic recovery. Unfortunately, it’s not at all clear that it will. Republicans in Congress currently don’t appear to have much appetite to pass further significant relief or stimulus measures, such as fiscal aid to states; extended federal unemployment benefits; or a bigger, better wage subsidy program to keep people connected to their work. Meanwhile, the White House seems to betting its response on Jared Kushner’s ability to speed up development of a vaccine, which … God help us. If none of this changes soon, there’s a good chance we really will be headed for a long depression of our own.
And when they report it they sound so enthusiastic about which is weird.
"THEY ARE NOW 1.5 MILLION PEOPLE UNEMPLOYED IN PA!!!!!!!!
Thanks to the coronavirus crisis, the United States is now facing its highest unemployment rate since the Great Depression.
The unemployment rate doesn't give the complete picture of the situation now. There were many factors that caused the Great Depression. There isn't a lack of work that's the problem, or low-demand for products and services, there is an obstacle preventing access to them. Once business finds a different way to do things than they have in the past with the right leadership it will be back on track much sooner than it was during the Great Depression. I continue to work from home, and remain employed. But earning money without a way to spend it is what is hurting the economy now. Big ticket items like a new car, you can't freely go test drive cars during this process, because business isn't setup to allow that, so that is going to have to change. Many very good restaurants have closed and didn't even attempt to offer pick-up only, which is a mistake because some restaurants were pickup or delivery only for years that were successful and still are. Realtors have to change how they have sold homes, but they've never faced this before so they stopped selling. No open houses and they aren't taking people around in the car to show them a home. The smart ones are changing how they've done business while others have stopped selling.
The worst thing anyone can do now is panic and continue to spread fear quoting the unemployment rate and talking about the Great Depression. It isn't the same situation at all.
Yep... wife and I both are. I just put in 30 hours of OT in back to back weeks. I can't help but wonder how many of these 20 million jobs lost are cashiers at Taco Bell.
The only people I know that have lost their jobs are a couple high school teenager friends who work part time at Dominos... and when you factor in the $600 bonus UI they are making like 3x their weekly pay on unemployment. LOL
If they are actually getting the cash...........plenty of people applied and didn't get a dollar yet.
20mm lost jobs are not just minimum wage jobs.
The bigger concern should be how many jobs are NOT coming back? How many movie theaters will close permanently? Mall/retail stores/gyms? Bars/restaurants? Consider the "lost sales" that won't happen. Hair salon closed for 2 months, people aren't coming in for an "extra" haircut for the one they missed. I played golf with a dentist, closed 7 weeks and he expects 90% of his lost work will not happen. Nobody will come in for a extra cleaning, if you had plans for cosmetic dental work and lost your job you certainly won't get the dental work done.
I think the trickle down stuff is going to rock 2020. Car salesman gets laid off, then doesn't sell as many cars when he returns to work. He doesn't spend at the mall, doesn't go out to dinner/bars after work, cancels the family trip to Disney (no Disney dollars, no airline/hotel/car rental) this summer. Now multiply this out for the rest of the country, then what will Christmas sales look like? What happens if Corona comes back in September?
Americans are getting blinded by the free money, 0% car deals and the "cool, time off....wish the beaches were open" but big trouble is barreling down the tracks!
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