Observations on the Historic April Unemployment Rate
According to the Bureau of Labor Statistics, April’s unemployment rate was the worst since the Great Depression. Last month, 20.5 million people lost their jobs with the unemployment rate increasing by 10.3 percentage points since March to 14.7 percent. This is the highest rate and the largest over-the-month increase in the history of the series (seasonally adjusted data are available back to January 1948). Dr. Erica Groshen, Senior Extension Faculty member at Cornell University and former BLS Commission, noted the COVID crisis has suspended or curtailed about 23.4 percent of U.S. employed workers. Of those, 79 percent maintained a tie with their employer, while the remaining 21 percent did not and exited the labor force. The high share of maintained relationships with employers should be helpful for speeding the recovery when restrictions are lifted. However, this alone cannot guarantee a rapid recovery because ties can weaken over time, some employers will not survive long enough to recall their workers, and other employers may need a new business model with different staffing requirements.
Source: US Bureau of Labor Statistics, Current Population Survey and Cornell ILR calculations.
Dr. Groshen also discusses the notable methodological issues BLS encountered in compiling the data and how they managed them. For instance, as in March, pandemic-related disruptions reduced response rates to the household survey by 13 percentage points in April. The overall response rate for the payroll survey was normal. Fortunately, the BLS found the response rates sufficient to meet its quality standards.
Link to Dr. Groshen’s full report, What the April 2020 Jobs Report says about COVID-19’s impact.