U.S. Economy Lost 20.5 Million Jobs in April Due to COVID-19, Unemployment Rate Rises to 14.7%

Jobs Lost in March Revised Down by 169,000 from -701,000 to -870,000

Washington, D.C. (PPD) — The U.S. Bureau of Labor Statistics (BLS) reported the U.S. economy lost 20.5 million jobs and the unemployment rate rose to 14.7 in April. The historic losses in jobs and increase in rate are due to the mitigation efforts to slow the spread of the coronavirus (COVID-19).

As bad as those numbers are, they both beat their respective consensus forecasts. Nevertheless, this is the highest rate and the largest over-the-month increase in the history of the unemployment rate series.

Forecasts for job losses ranged from a low of 30,000,000 to a high of 8,600,000. The consensus was for a loss of 21,500,000. Forecasts for the unemployment rate ranged from a low of 12.3% to a high of 18.9%. The consensus forecast was 16.4%.

The number of unemployed persons who reported being on temporary layoff increased ten-fold to 18.1 million. The number of permanent job losers rose by 544,000 to 2.0 million.

The labor force participation rate fell by 2.5 percentage points over the month to 60.2%. That’s the lowest rate since January 1973, when it was just 60.0%. The labor force participation rate has risen and held above the critical 63% threshold under the Trump Administration after struggling in the prior.

The equally-important but less cited employment-population ratio, at 51.3%, fell by 8.7 percentage points. That is the lowest rate and largest month-over-month decline in the history of the series.

The change in total nonfarm payroll employment for February was revised down by 45,000 from +275,000 to +230,000, and the change for March was revised down by 169,000 from -701,000 to -870,000.

The U-6 unemployment rate — an alternative measure of labor underutilization, seasonally adjusted — rose from 8.7% in March to 22.8 in April. That’s the highest level ever measured for this series.

U-6 gauges total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers.

On Thursday, the U.S. Labor Department (DOL) reported initial jobless claims rose slightly more than expected by 3,169,000 for the week ending May 2. The advance seasonally adjusted insured unemployment rate rose again to 15.5% for the week ending April 25, the highest level in the history of the series.