Friday's Jobs Numbers Will Be Brutal But Won't Tell The Whole Story

May 7, 2020
Originally published on May 8, 2020 9:54 am

The Labor Department is expected to deliver a historically bad employment report Friday, showing millions of jobs lost last month as the jobless rate soared to around 16% — the highest level since the Great Depression.

Unemployment inched up to 4.4% in March as the coronavirus began to take hold in the United States. It approached 25% during the Great Depression and remained elevated until World War II.

As painful as the report for April will be, it won't tell the full story of the economic wreckage left by the coronavirus and the government's drastic efforts to control it.

The report is based on surveys conducted in the middle of April, and claims for jobless benefits suggest that millions of additional jobs have been lost since then. What's more, the headline unemployment figure includes only people who are actively looking for work and those on temporary furlough, ignoring millions more who have been involuntarily idled by the pandemic.

Even with those limitations, the April snapshot will be staggering — a freeze-frame image of an economy that was abruptly and deliberately stopped in its tracks in a desperate bid to slow the spread of a deadly virus.

"The whole world is kind of at a standstill now, so we're feeling the effects of that," said Carmine DiBiase, a longshoreman in Florida whose work loading cruise ships was suspended weeks ago.

The payroll company ADP foreshadowed the carnage earlier this week, reporting that private-sector employers shed more than 20 million jobs last month. By comparison, the worst monthly job loss during the Great Recession was 800,000 in March 2009.

"All the plans for this year went out the window," said David Edwards, who expected to spend the summer guiding people around a zoo in Coal Valley, Ill., that's now shuttered, and working as a mascot for a minor league baseball team whose games have been suspended.

"The two seasonal jobs that I had are both shut down for now," he said. "I feel very scared about my future."

ADP said leisure and hospitality jobs were especially hard hit, but workers in almost every industry suffered layoffs, including retail clerks, construction crews and even health care workers.

Forecasts of the April unemployment rate vary widely — from 14% to 17% or even higher. Even the low end of that range would be well above the postwar peak of 10.8% in 1982 and four times the rate in February, which matched a 50-year low.

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We know that the U.S. economy is suffering, and today we have a better understanding of just how bad it is. This morning, the Labor Department reported that this country lost more than 20 million jobs in April. That was the first full month of the coronavirus lockdown. The unemployment rate is now at 14.7%. That's the highest it's been since the Great Depression. NPR's chief economics correspondent Scott Horsley is on the line with me. Good morning, Scott.

SCOTT HORSLEY, BYLINE: Good morning, Noel.

KING: These numbers are absolutely staggering. Can you put them in perspective for us?

HORSLEY: Sadly, this is one for the history books. The worst monthly job loss we'd ever seen before this was back in 1945, when the nation cut 2 million jobs as it demobilized after World War II. This morning's report shows 10 times that many jobs were lost in April.

And as painful as that is, it still doesn't tell the full story of the economic wreckage the pandemic has caused. That unemployment rate you mentioned - 14.7% - that only includes people who are on temporary furlough or actively looking for work. And, of course, a lot of people are not looking right now because they're concerned about the coronavirus or the government's told them to stay home. There is a broader measure of unemployment, which includes people who've given up looking and those who are working less than they like. That figure last month was almost 23%.

KING: Wow. Where were the job cuts, what industries?

HORSLEY: Really, across the board. About a quarter were in bars and restaurants. Retail lost more than 2 million jobs. Nearly 1 1/2 million health care jobs disappeared as doctors and dentists closed up their offices. And government lost 800,000 jobs. A lot of that was related to school closings. I've been talking with some of the people behind all these scary numbers.

CARMINE DIBIASE: The whole world's kind of at a standstill right now. So we're feeling the effects of that.

HORSLEY: Carmine Dibiase (ph) is a longshoreman at Port Canaveral in Florida. He used to work five days a week loading and unloading cruise ships. Of course, that all came to a halt weeks ago when cruise ships stopped sailing. When that happened, Dibiase and his son, who's also a longshoreman, spent about 10 hours each on the computer just trying to navigate Florida's nightmarish unemployment system. Dibiase finally got his first unemployment payment about a week ago for about half what he'd make on the job. He knows a lot of people are still waiting.

DIBIASE: While we are tightening our belt here, I'm certainly better off than many. I haven't been to city meals yet, that's for sure. There are some people that aren't in breadlines. It's tough.

HORSLEY: Beverly Pickering (ph) has also been out of work. She's a dog sitter near Detroit, who ordinarily looks after the pets of a lot of autoworkers when they travel.

BEVERLY PICKERING: That absolutely collapsed. I've had no customers traveling. And as far as dog walks, everybody's home and walking their own dog.

HORSLEY: Detroit was also a hotspot for coronavirus infections. So Pickering found herself worrying about getting sick as well as how she'd pay her utility bills and car insurance.

PICKERING: Even though most of the creditors, I think, are being really pretty generous with people, there's a limit. It was a nerve-racking few weeks there.

HORSLEY: A saving grace for Pickering has been the expansion of unemployment benefits which has allowed her to collect, even though she's self-employed.

PICKERING: I started getting that a few weeks ago, and it has saved my life. It's paying all the bills and doesn't leave a whole lot over to do anything with, but there's nothing to do anyway, right?

HORSLEY: David Edwards (ph) thought he had two seasonal jobs lined up this year, showing visitors around a zoo in Coal Valley, Illinois and prowling around a minor league baseball park in a furry costume as mascot for the Quad City River Bandits.

DAVID EDWARDS: I am the big raccoon.

HORSLEY: But all those plans went out the window. The zoo is closed to visitors for the time being, and there's no telling when the River Bandits might be able to play ball. Edwards, who recently finished college studying music, also hoped to audition for singing gigs, but that's on hold for now. He's just trying to figure out a safe way to make some money, while also trying to imagine what life will look like after the summer.

EDWARDS: I feel very scared about my future. I just don't know what funding is going to be, what festivals or programs are going to survive. And that's going to make everything else more competitive, too.

HORSLEY: A lot of people are unsure what the future might look like. Carnival says it hopes to start running cruises again in August. But longshoreman Dibiase wonders, who's going to get onboard?

DIBIASE: How many people are going to be able to travel after being out of work for that long? You've been living on stimulus money. I know I'm not taking a vacation. Then, who feels confident and safe enough to get on a boat, when the perception's out through the media boats are a higher risk?

HORSLEY: Pickering, the Detroit area dog sitter, is feeling some glimmers of hope just in the last few days. With automakers announcing plans to restart factories, she's beginning to hear from clients who might need their dogs walked again soon. She's looking forward to that. She's heard about one dog who keeps looking out the window for her every afternoon at the time they used to go for walks. Pickering says she's ready to go back to work. But as with everything else, there may have to be some adjustments.

PICKERING: I'll use my own leashes. We may have to be somewhat less affectionate than we've been. It doesn't necessarily always have to be petting. If you can walk a dog and socially distance, that's kind of what we'll be doing.

HORSLEY: Pickering is also prepared for a little couch chewing and pillow ripping, if people who've been home all day with their dog start going back to work. Well, of course, the dogs are going to adjust over time. The bigger question is, are we?

KING: You know, Scott, some parts of the country are starting to reopen. So I wonder, is this April report likely to be the rock bottom, the worst one?

HORSLEY: It's probably going to show the biggest monthly job loss. But it's not as if employers are going to suddenly turn around and start hiring people in large numbers. The next monthly report could even show an unemployment rate ratcheting up a little bit.

KING: NPR's Scott Horsley. Scott, thanks so much.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.