Orders across the country for people to stay home in late March and April to slow the spread of the coronavirus led to economic disruptions and ultimately job losses.
The pandemic’s impact on the economy is reflected in the latest government jobs report released May 8, which showed the U.S. jobless rate for April was 14.7%, up from 4.4% in March. The crisis-fed spike in unemployment was expected by many economists including Michael Hicks, an economist and director for Ball State University’s Center for Business and Economic Research, who in late March forecasted unemployment to rise above 10%.
Hicks said the May 8 government jobs report shows “the U.S. is in the early stages of the worst economic conditions since the Great Depression.”
“The bulk of job losses fall in sectors which will continue to suffer low demand after shelter in place orders have been loosened,” Hicks said. “This strongly suggests that the disease, not government action is the cause of economic distress (and) regardless of state action to relax shelter in place rules, the economy will continue to experience Great Depression levels of stress until COVID-19 vaccinations or treatments are available.”
He said a bright spot in the jobs report showed that of 20.6 million out of work in April 18 million said their layoffs were temporary, indicating a majority of the unemployed expected to return to work as conditions improved.
Hicks said the latest jobless rate is the highest the county’s unemployment rate has been since the Great Depression but is below the 17% rate suggested by data on initial jobless claims the past two months.
Hicks said the number of workers facing part-time employment for economic reasons almost doubled the past month, from 5.7 million to 10.8 million workers. This is a stark increase since February, when 4.3 million workers experienced involuntary, part-time work.
Voluntary part-time work dropped significantly, from 20.6 million to 12.3 million, but the cause for this decline wasn’t clear in the jobs report. Hicks said the decline may have either come through job losses, or from workers moving to full-time work.
The industries hardest hit by the pandemic included leisure and hospitality, and in retail and wholesale trade, Hicks said.