These last few months have been rough for the economy. We saw that with 701,000 jobs being lost back in March, which got revised to 870,000 jobs, temporary layoffs becoming permanent for many Americans, and the end of the record expansion period of the United States economy. The DOW Jones has been holding stable for the last few months, but it’s still 5,000 points below its peak of almost 30,000 points back in February. Some parts of the country have begun to reopen, but this last April jobs report proves that this is truly the worst economic time period for America since the Great Depression. The curve for the coronavirus is flattening out in our country, but the economic turmoil is just starting to accelerate.
Over a ten-year time period that has gone through two Presidents, the United States saw a net gain of 22.8 million jobs to the economy in total. In just one month, all that growth and recovery from the 2008 Recession has been wiped out. We saw a loss of 20.5 million jobs in April, which was coupled with a surge in the unemployment rate to 14.7%. In the entire roughly one-year period of job losses in the Great Recession, America saw a loss of almost 9 million jobs. In other words, you get that last month of April if you take the entire Recession, double the losses plus a few million, and compress it into a one month period.
This 14.7% unemployment rate has not been seen since 1937, when the economy dipped into a second recession while it was still recovering from the Great Depression. The unemployment rate in any recession after that does not come anywhere close to how bad things are right now. The horrible 1982 recession that sent Ronald Reagan’s disapproval rating surging? The unemployment peaked at 10.8% in that one, 3.9% behind our 14.7%. And the 1992 recession that helped send George H.W. Bush to his reelection loss? At 7.8%, the peak unemployment was almost just half of the current situation. This unemployment rate has not been seen by anyone in any generation in the United States since the Silent Generation.
Unsurprisingly, the leisure and hospitality industry did not get a break with this jobs report. Ever since COVID-19 swept the world by surprise at levels that have not been seen in one hundred years, leisure stocks have been suffering. Disney is still 15% down in its stock from its peak back in February even though it has been slowly recovering lately. And as for jobs, 7.7 million jobs were lost in leisure and hospitality. That’s nearly the entire job losses of the Great Recession in one industry in a single month.
Notably, the manufacturing industry got hit once again. It has suffered job loss after job loss from automation and outsourcing, and it just took a 1.1 million job loss beatdown in April. It hasn’t even recovered its losses from the last recession, and now it’s getting destroyed even more with another one.
What happens if you add in the underemployed and people who have simply given up on looking for a job? This is called the “real unemployment”, and if you count that, then our unemployment towers up to 22.8%. These are at Great Depression levels, where unemployment peaked at 25% (although this 25% is not the “real unemployment” figure). Clearly, this unemployment won’t suddenly go back to its normal 4-5%. It is going to take years to recreate these jobs, and years more to reverse some of these impacts the unemployment will have on Americans across the country.
