The United States shed 20.5 million jobs in April as the ripple effects of the coronavirus pandemic tore through the economy and shutdown orders forced business to close their doors. According to the monthly report by the Bureau of Labor Statistics, the unemployment rate in April was a staggering 14.7%, the highest on record in the post-World War II era.
Even days before its release, the report had been generating a tsunami of superlative-laden headlines. “Record-shattering, “Great Depression-like,” and “single worst jobs report in history” were among the many grim descriptions.
And yet, while those apocalyptic narratives pretty much hold up, the news was not as dire as some had predicted. Economists surveyed by Dow Jones expected 21.5 million job losses and an unemployment rate of 16%. At its peak during the Great Depression of the 1930s, that number was close to 25%.
April’s report stood in stark contrast to jobs data from only two months earlier, when the unemployment rate was at a 50-year low and the economy was riding a decade-long wave of job growth. Although many knew the economic expansion—our longest on record—couldn’t last forever, few would have predicted it would collapse so abruptly.
As bad as things are, the markets could be in for a substantial rally today, if stock futures are to be believed. According to CNBC, Dow Jones Industrial Average futures jumped by 235 points on Friday. The Nasdaq, buoyed by tech giants like Facebook, Amazon, and Apple, was up 1.4%.
Why the optimism? One word: reopening.
Despite warnings from public health officials that restarting the economy too soon could spark new COVID-19 outbreaks and cause an increase in deaths, many states have begun to do just that. As more states test the waters, investors are clearly hoping for a rapid return to an economy that at least somewhat resembles the one we had in the pre-coronavirus era. Time will tell.
Check out the full report here.