Unemployment rate rises to 14.7%, highest rate since Great Depression

Unemployment rate in the U.S. hit a record high of 14.7% in April. Yahoo Finance’s Jessica Smith breaks down the latest jobless claims.

Video Transcript

ADAM SHAPIRO: Let's get back to that unemployment report. Jess Smith joins us now from Washington, DC. And we expected it to be bad. It was bad. It could have been a lot worse, though, because of the way they measured it, right, Jess?

JESSICA SMITH: Right. And economists were expecting to see about 22 million job losses, but the US economy did lose 20.5 million jobs in April. The unemployment rate spiked to 14.7%. And the unemployment rate rose by 10.3 percentage points from March to April, which is the biggest month-over-month increase in the history of the series.

The labor force participation rate dropped to 60.2%. That is the lowest since January of 1973. And the number of people who are working part-time jobs because their hours have been cut or they can't find a full-time job nearly doubled to 10.9 million in April.

And looking at some of the sectors that saw the biggest job losses, leisure and hospitality lost 7.7 million jobs. That's a 47% decrease from the month prior. Most of those job losses were in restaurants and bars. Education and health services shed 2.5 million jobs. Professional and business services lost 2.1 million. Retail also lost 2.1 million, and manufacturing lost more than a million jobs.

Average hourly earnings rose by $1.34 to $30.01. That's a 7.9% increase year over year. That does reflect the substantial job losses that we are seeing among lower-wage earners.

And there were also some revisions for the months of February and March. Both were revised downward by 214,000 jobs total. And U6 finally, the broadest measure of unemployment, came in at 22.8%.