US job market suffers its worst month in history

Unemployment claim form (Photo: MGN Photo - Julie Chasen / MGN)

(CBS News) — A staggering 29 million American lost their jobs in April as the spreading coronavius shuttered stores, factories and offices, canceled events, and brought transit around the country to a sudden stop.

Payrolls fell by 20.5 million last month, leaving 23 million newly unemployed, the Labor Department said Friday. Another 6 million Americans left the workforce altogether. The unemployment rate rose to 14.7%.

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The sheer scale of economic destruction — which wiped out a decade’s worth of job gains in a matter of weeks — defies historical comparison. Prior to April, the largest one-month hit to payrolls was in September of 1945, when 1.9 million jobs were lost as the country demobilized from World War II. In March of 2009, in the depths of the Great Recession, 800,000 jobs were lost in a single month.

Skyrocketing unemployment rate remains well shy of the 25% rate reached during the depths of the Great Depression. But it took four years for the jobless rate to finally peak in 1933. The speed of job losses in April is akin to what is seen after major floods or hurricanes, economists said — on a nationwide scale. “It’s like a natural disaster where the eye of the hurricane stays over the whole world,” said Julia Pollak, labor economist at ZipRecruiter.

While the headline unemployment rate is the highest since the Great Depression, even that eye-popping figure doesn’t fully capture the extent of the damage, economists say.

“The notion of unemployment includes the idea that you’re without a job and you are actively looking. This is a very difficult environment for people to be actively looking for a job,” said Donald Marron, director of economic policy initiatives at the Urban Institute.

To be sure, many of the workers who lost jobs in April will likely return to work once the crisis passes. But even if just one-fourth of job losses are permanent, upwards of 8 million workers will need a job in an economy that Pollak notes was creating 2.3 million new jobs per year.