- Job losses hit 20.5 million in April
- Unemployment rate rises to 14.7%
- Leisure and hospitality hit hardest: 7.7M losses
The April U.S. non-farm payrolls report revealed a staggering 20.5 million job losses as the economic impact of the COVID-19 pandemic forced businesses to lay off workers in historic waves. The unemployment rate spiked to 14.7%, but that barely captures the depth of the loss of jobs, wages, and hours worked across industries. The 20.5 million job losses were by far the most in the history of the U.S. labor market.
The services sector of the economy, which includes leisure and hospitality, among other businesses that deal face-to-face with consumers, lost 7.7 million jobs due to stay-at-home policies. That sector will also be the last to recover given social distancing restrictions still fully, or partially in place around the country.
Other employment sectors also saw staggering losses as business activity came to a sudden standstill in mid-March:
- Retail: 2.1 million
- Professional and business services: 2.1 million
- Health care: 1.4 million
- Arts, entertainment & recreation: 1.3 million
- Manufacturing: 1.3 million
- Construction: 975,000
- Government: 980,000
The labor force participation rate, which measures the economy's active workforce, decreased by 2.5% to 60.2%, the lowest rate since 1973. The decline in full-time workers was also staggering. The number of people who usually work full-time declined by 15 million, while part-time workers declined by 7.4 million, according to the Labor Dept. The “real” unemployment rate, which includes workers not looking for jobs and the underemployed, climbed to 22.8%.
While the surge in unemployment was expected given the rise in weekly jobless claims, the restarting of the U.S. economy that includes robust hiring remains very uncertain. Most companies are dealing with broken balance sheets and don't have major hiring plans as the economy struggles to recover its steepest drop in history.