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Factories Lost 1.3 Million Jobs in April: Unemployment Reaches 14.7%

May 8, 2020
20.5 million people lost their jobs between March 12 and April 12.

The unemployment rate in the United States skyrocketed by 10.3% in April to land at 14.7% as the economic losses caused by fallout from the coronavirus outbreak builds up. The figures are based on whether or not employees were paid for work during the reference period.

Manufacturing, as a group, lost 1.3 million jobs, most of it in durable-goods production. Employment in the leisure and hospitality sector fell by 7.7 million, nearly 50%. The number of unemployed people rose by 15.9 million to 23.1 million. According to the Department of Labor, this month’s increase is both the highest rate and largest over-the-month increase since the survey, issued by the Bureau of Labor Statistics, began collecting the information in January, 1948.

Durable goods manufacturing in particular lost almost a million jobs itself as employment dropped 914,000. About a third of those jobs (382,000) were in motor vehicle and parts production, and 109,000 of them were in fabricated metal products. Nondurable goods manufacturing employment fell by 416,000. The average workweek for manufacturing employees fell by 2.1 hours to 38.3 hours.

Those results extend and multiply last month’s grim results: According to the Bureau’s updated figures for March, manufacturing lost 34,000 jobs, 20,000 of which were in durable goods and 14,000 in nondurable goods. 3,200 of the lost durable goods jobs were in motor vehicles and parts.

A statement from the Alliance for American Manufacturing noted that manufacturing has yet to fully recover from the Great Recession, and that overcoming the current wave of job losses “will be a significant challenge.” CEO of the Alliance Scott Paul wrote that Congress should pass “unprecedented investments in rebuilding America, measures to spur auto sales, and incentives to bring back jobs from overseas.” COVID-19 related quarantines have led to factory stoppages and furloughs, most visibly in the motor vehicle and commercial airspace industries. Compounding the pain from lost production, domestic automakers have reported poor sales records for the first quarter as consumers stay home.

Since late March, when unemployment claims shot to over six million in one week, more than 32 million people have applied for unemployment benefits. In April, the majority of unemployed people in the survey period who had been jobless for less than 5 weeks jumped by 10.7 million to 14.7 million, or slightly less than two-thirds of the total unemployed population.

In a reader survey published April 29 by IndustryWeek, 31% of respondents said they had implemented furloughs, temporary layoffs, or reduced pay for reduced hours. The Bureau of Labor Statistic’s figures count anyone not paid for work between March 12 and April 12. That means employees who are temporarily unemployed by furloughs are not counted as “employed” by the survey, even if they continue to receive benefits. In a sign of businesses attempting to adapt without layoffs, the number of people working part-time for economic reasons almost doubled to 10.9 million. That category includes employees trying but unable to find full-time jobs as well as employees whose hours had been reduced to part-time.

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