Unemployment rate soars to 14.7 percent, highest level since the Great Depression
President Donald Trump has pushed for a swift turnaround after weeks of lockdowns, saying he believes the economy will “transition into greatness” in the third quarter.
However, as the country slowly reopens, the economy is not expected to simply bounce back. Many customers remain hesitant about returning to restaurants and bars, watching movies, or attending sporting events.
And despite trillions of dollars in emergency relief from the government, multiple rounds of crisis intervention from the Federal Reserve, and fiscal stimulus such as the Paycheck Protection Program, economists warn that many businesses will not survive. Those who have taken PPP loans are funded for only eight weeks, after which time they may need to make further cutbacks — and employees who were furloughed may become permanent layoffs.
Major retailers such as Neiman Marcus and J.Crew have already filed for bankruptcy, with many more skipping rent payments in order to preserve their business.
Yet some economists say the historic April jobs report does not even capture the full picture.
In an interview with Savannah Guthrie on NBC’s “TODAY” show Thursday morning, President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, said Friday’s official unemployment rate is likely to “understate how bad the damage has been. I think the real number is probably around 23 or 24 percent. It’s devastating.”
The monthly jobs report surveys the number of people who are actively seeking work, but with millions of workers expecting to return to their job once the shutdowns end, they are not currently seeking other employment, and would not be captured in the count. The Bureau of Labor Statistics, which compiles the data for the report, noted that if these workers were included, the unemployment rate would have been almost 5 percent higher, or close to 20 percent.