Coronavirus sends US jobless rate to Depression era levels

The coronavirus crisis has sent US unemployment surging to 14.7 percent, a level last seen when the country was in the throes of the Depression and President Franklin D Roosevelt was assuring Americans that the only thing to fear was fear itself.

And because of government errors and the particular way the Labor Department measures the job market, the true picture is even worse. By some calculations, the unemployment rate stands at 23.6 percent, not far from the Depression peak of nearly 25 percent.

The Labor Department said on Friday that 20.5 million jobs vanished in April in the worst monthly loss on record, triggered by coast-to-coast shutdowns of factories, stores, offices and other businesses.

The breathtaking collapse is certain to intensify the push-pull across the US over how and when to ease stay-at-home restrictions. And it robs President Donald Trump of the ability to point to a strong economy as he runs for reelection.

“The jobs report from hell is here,” said Sal Guatieri, senior economist at BMO Capital Markets, “one never seen before and unlikely to be seen again barring another pandemic or meteor hitting the Earth.”

The unemployment report indicated that the vast majority of those laid off in April — roughly 75 percent — consider their job loss temporary, a result of businesses that were forced to close suddenly but hope to reopen and recall staffers.

Whether most of those workers can return anytime soon, though, will be determined by how well policymakers, businesses and the public deal with the health crisis. Economists worry it will take years to recover all the jobs lost.

The meltdown has occurred with startling speed. In February, unemployment was at a more than 50-year low of 3.5 percent, and the economy had added jobs every month for a record nine-and-a-half years.

In March, unemployment was 4.4 percent. “In just two months the unemployment rate has gone from the lowest rate in 50 years to the highest rate in almost 90 years,” said Gus Faucher, chief economist at PNC Financial.

Nearly all the job growth achieved during the 11-year recovery from the financial meltdown has now been lost in one month.

Leslie Calhoun lost his job cleaning Atlantic City, New Jersey, casinos after 20 years. He, his wife, their two daughters and his sister-in-law are surviving on his wife’s paycheck from a medical facility as he wrestles with an unemployment system.

“The bills are piling up,” he said. “We’re eating a lot of ramen noodles and hot dogs. What I wouldn’t give for a nice meal of baked chicken and steak, some fresh vegetables.”

The last time unemployment was this high was in 1939 at the tail end of the Depression, before the US entered World War II.