Economists look ahead on economy after historic April job losses

The April jobs report was both historic and dramatic. More than 20 million jobs were lost last month as a result of the economic shutdown and coronavirus pandemic, and now there's a debate over whether the worst is over. CNBC's Steve Liesman reports.

The impact of the coronavirus-induced economic shutdown tore through the U.S. labor market in April at historic levels, slashing 20.5 million workers from nonfarm payrolls and sending the unemployment rate skyrocketing to 14.7%, the Labor Department reported Friday.

Both numbers easily smashed post-World War II era records and help reflect the profound damage done through efforts used to combat the virus.

Economists surveyed by Dow Jones had been expecting payrolls to shed 21.5 million and the unemployment rate to go to 16%. April’s unemployment rate topped the post-war record 10.8% but was short of the Great Depression high estimated at 24.9%. The financial crisis peak was 10% in October 2009.

The bleak numbers paint a “pretty dismal picture, but April may be it for job losses going forward with the country starting to reopen,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “If there is a silver-lining in today’s dismal jobs report, it is in the realization that the economy cannot possibly get any worse than it is right now.”

A more encompassing measure that includes those not looking for work as well as those holding part-time jobs for economic reasons also hit an all-time high of 22.8%. That reading may be a more accurate picture of the current jobs situation as millions of workers are being paid to stay home and thus not willing or able to look for new jobs. Its previous worst level was 17.2% in April 2010.

The jump in the “real” unemployment rate reflected a plunge in the labor participation rate to 60.7%, its lowest level since 1973.

Despite the stunning numbers, Wall Street was poised for another rally Friday, and government bond yields were higher as well.

The April numbers represent a stark reversal for a jobs market that had been on fire only two months ago. February saw a payroll gain of 230,000 that was high for a recovery that lasted nearly 11 years. The month’s total was revised down 45,000. March’s initially reported loss of 701,000 also was pulled down further, to 870,000.

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