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Commentary By Beth Akers

MI Responds: April 2020 Jobs Report

Economics Employment

This morning, the Bureau of Labor Statistics published a devastating economic report, indicating the loss of over 20 million jobs last month, as the unemployment rate spiked to a post-war high of 14.7 percent. This is the first official glimpse of the damage caused by closures of the economy in early March.  

This rate of joblessness exceeds the worst point of the Great Recession, when unemployment reached 10 percent, but doesn't yet rival the worst of the Great Depression, when it rose to 24.9 percent in 1933. This time around, no sectors were spared the devastating economic impact of the pandemic, as declines in employment were seen across the economy.

The jump in the unemployment rate—more than 10 percentage points—is unprecedented and also offers a reminder that this level of joblessness is unique. Historically, depression periods eroded the labor market incrementally, rather than all at once. These job losses are driven entirely by the shutdown of the economy, not market fundamentals. This offers some hope that a labor market recovery could be swift if economic activity can resume in the near term. Such a “V-shaped” recovery is the best case scenario—but it is likely that some of the damage we’re seeing will be slow to heal, with depressed growth persisting in the years to come.

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Beth Akers is a senior fellow at the Manhattan Institute and a former Council of Economic Advisors economist. Follow her on Twitter here.