May 8, 2020 - Economy & Business

Unemployment rate soars to 14.7% in April

Data: Bureau of Labor Statistics; Chart: Axios Visuals
Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. economy shed a record 20.5 million jobs in April as the unemployment rate skyrocketed to 14.7% — more than quadrupling from the rate seen before the coronavirus outbreak — according to government data released Friday.

Why it matters: It's by far the worst jobs report in history, highlighting the depth of the unprecedented toll the pandemic is having on the labor market.

By the numbers: Not since the Great Depression has the unemployment rate been this high.

  • The speed with which the job destruction happened is also staggering: the unemployment rate jumped 10.3% in a single month, which has never happened before in history.

Between the lines: You’re only counted as unemployed if you’re actively looking for work, but many Americans aren’t looking for work because of state-imposed lockdowns — effectively warping the rate.

  • Another 9.9 million people were jobless, but not counted as unemployed because they weren't actively looking for work.
  • Labor Department officials also said if certain jobless workers were considered unemployed rather than "absent from work," then the unemployment rate "would have been almost five percentage points higher," per the release.

What to watch: The job market recovery hinges on employers welcoming workers back to work once lockdown restrictions ease.

  • Of the 20.5 million jobs lost: 18.1 million unemployed workers said their layoff was temporary, while 2 million said they were permanent job losers.
  • Yes, but: There's no guarantee that temporarily laid off workers will return to work, particularly as businesses shutter from economic pressure or operate at a lower capacity.

What they're saying: "This has to be the most heartbreaking day in the history of the job market," Austan Goolsbee, former chair of the Council of Economic Advisers during the Obama administration, told CNBC.

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