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The U.S. unemployment rate in April rose to 14.7% as 20.5 million Americans lost their jobs last month as a result of the coronavirus pandemic, according to the Labor Department, which released its monthly unemployment report May 8.
The trucking industry was not immune to the deep labor cuts, and the Labor Department said 88,300 trucking and warehouse positions were lost, even as many trucking firms were busy delivering critically needed medical supplies to hospitals and clinics and groceries to stores.
American Trucking Associations Chief Economist Bob Costello told Transport Topics the monthly numbers were bad for the trucking industry.
“It was ugly. The trucking industry lost 88,300 jobs, and we lost more jobs in one month than we did in all of 2008,” he said.
Costello said the trucking industry is slowing, especially in the tanker sector, and those companies that service the nation’s ports, moving imports and exports.
“It was a tough month, and when we start reporting volume numbers, I would expect to see some numbers that are not pretty,” he said. “In March, we were all going out and buying food and toilet paper, and it was all hands on deck, and that’s slowed down a bit in April. I think we’ll see volumes fall in April, down significantly.”
The 14.7% unemployment number is the worst since the Department of Labor began compiling statistics in 1948, and it compares with the 3.5% unemployment rate in April 2019, which was one of the strongest numbers in the past 50 years.
The month-to-month change also showed a significant drop from March, when the first stage of the pandemic was just being felt, and the unemployment rate had just started to slide up to 4.4%.
“The substantial job declines related to the coronavirus pandemic started in March, as payroll employment declined by 870,000, as revised. Job losses accelerated in April, as an additional 20.5 million jobs were lost,” Commissioner of the Bureau of Labor Statistics William Beach said in a statement. “These April losses were pervasive across all industry sectors, and brought nonfarm employment to its lowest level since February 2011.”
According to the Labor Department, employment in transportation and warehousing fell by 584,000 during April, with 185,000 job losses in transit and ground passenger transportation and 141,000 in air transportation.
The retail sector of the economy continued to show weakness as employment declined by 2.1 million during April. Several legacy retail businesses, including Neiman Marcus, Pier 1 Imports, Modell Sporting Goods, and others, have filed for bankruptcy in recent weeks because of the steep downturn in the economy. But, by contrast, large general merchandise stores, including warehouse clubs and supercenters, added 93,000 jobs.
“Employment in the leisure and hospitality industry decreased by 7.7 million in April or 47%,” Beach said. “Job losses in food services and drinking places accounted for nearly three-quarters of the decline, as many restaurants and bars were closed or curtailed operations due to the coronavirus pandemic.”
The manufacturing sector also took a significant hit, losing 1.3 million jobs in April, with those working in the production of durable goods shedding 914,000 positions. Breaking that down further, workers who manufactured motor vehicles and parts lost 382,000 jobs, fabricated metal parts 109,000 jobs, and machinery 80,000. Employment in nondurable goods industries decreased by 416,000, including 86,000 in food manufacturing. Construction employment declined by 975,000 in April.
Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University, told TT the 14.7% unemployment figure was in line with what he was forecasting at 14.4%.
“This is a direct result that we’ve just had a hard economic stop,” he said. “When we flipped off the light switch, this was to be expected.”
While Dhawan said the numbers are bad, there is a sliver of optimism.
“You can’t keep laying off 20 million people every month; that is not going to happen. The May report will show some more damage, and that will be the true damage, but it’s not going to be another 20 million laid off.”
Dhawan said it’s essential that many employees are classified as being on furlough status, instead of laid off. In most cases, furloughed workers retain their benefits during this period, and companies usually call them back to their positions once economic conditions improve.
The Labor Department also said the number of people not in the labor force, but who currently want a job, stands at 9.9 million, a number that nearly doubled in April from March. Those people are not counted as unemployed because they are not actively looking for work during the four weeks ending with the April survey or were unavailable to take a job.
The increase in the want-a-job category reflects the impact of the pandemic on the job market, as mandatory business closures, stay-at-home orders and fear of the coronavirus illness kept many individuals from engaging in labor market activity in April.
“The speed of getting the economy going and getting people back to work will depend on how fast we get a health solution,” Costello said.
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