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Unemployment surges to Depression-era level of 14.7%

Recovery may take years

WASHINGTON — The coronavirus crisis has sent the U.S. unemployment rate 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.

The Labor Department said Friday that 20.5 million jobs vanished in April in the worst monthly loss on record, triggered by the coast-to-coast shutdowns of factories, stores, offices and other businesses. Unemployment is now at its highest point since 1939.

And because of government errors and the particular way it measures the job market, the true picture is even worse than the numbers suggest.

Despite four stimulus packages from the federal government, including a one-time $1,200 payment to most American adults and additional unemployment compensation benefits to nearly all workers displaced by the state-ordered closures, some representatives called for additional disaster relief funds.

U.S. Rep. Conor Lamb, D-17th, whose district includes parts of Cranberry Township, urged Congress on Friday to pass legislation that would relieve the economic burden on those impacted by government actions in the wake of the pandemic.

“Workers, families and small businesses are facing this difficult situation through no fault of their own, and they need help now,” he said in a statement. “Congress needs to pass additional, bipartisan legislation that gives families, small businesses, first responders and essential workers what they need during this crisis.”

The first-term congressman added that any disaster relief should include funds for personal protective equipment and virus tests to inspire confidence as the economy gradually reopens in Pennsylvania and across the nation.

“Everyone still needs cash, the ability to be tested, and proper PPE,” he said. “Only these things in combination will keep people safe and give them the confidence to get the economy moving again.”

The breathtakingly swift losses are certain to intensify the push-pull across the U.S. over how and when to ease the stay-at-home restrictions and the social-distancing rules.

“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.”

Stocks rallied on Wall Street in the morning when the report wasn’t quite as horrific as economists had forecast. The Dow Jones Industrial Average gained more than 300 points, or 1.3 percent.

Worldwide, the virus has infected at least 3.9 million people and killed at least 270,000, including more than 76,000 in the U.S., according to a tally by Johns Hopkins University based majority of April’s job losses — roughly 75 percent — are considered temporary, a result of businesses that were forced to suddenly close but hope to reopen and recall their laid-off workers.

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

The collapse has occurred with stunning speed. In February, the unemployment rate was at a more than 50-year low of 3.5 percent, and employers had added jobs for a record 9 1/2 years. In March, unemployment was just 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.

The last time unemployment was this high was at the tail end of the Depression, before the U.S. entered World War II. Unemployment peaked at 25 percent during the decade-long slump.

As bad as the numbers are, they don’t capture the full magnitude of the devastation.

The Labor Department said its survey-takers erroneously classified millions of Americans as employed in April even though their employers had closed down. If they had been counted correctly, the unemployment rate would have been nearly 20 percent, the government said.

Also, people who are out of work but aren’t actually looking for a new job are not officially counted as unemployed. An estimated 6.4 million people lost jobs last month but did not search for new ones, most likely because they saw little prospect of finding work with the economy shut down.

Counting them as unemployed would push the rate up further, to 24 percent, according to calculations by Heidi Shierholz, an economist at the Economic Policy Institute.

Though some businesses are beginning to reopen in certain states, factories, hotels, restaurants, resorts, sporting venues, movie theaters and many small businesses are still largely shuttered.

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