More than 20 million Americans file for unemployment during coronavirus crisis

A pedestrian walks past The Framing Gallery, closed due to the Covid-19 pandemic, in Grosse Pointe, Michigan Credit: Paul Sancya/AP

At least 20.5 million people in the US have filed for unemployment during the coronavirus crisis, the steepest monthly drop in job losses since the Great Depression.

It brings the unemployment rate to 14.7 per cent in April, with 20.5m jobs gone in a single month - making it the worst month on record.

The job losses reported by the Labour Department on Friday reflect the scale of the severe recession facing the US in nearly every industry.

Virtually all job growth achieved during the 11-year recovery from the Great Recession has now been lost in the space of a month.

The report indicated that the vast majority of April’s job losses - around 90 per cent - are considered temporary, a result of businesses closing.

As recently as February, unemployment in the US was at a five-decade low of 3.5 per cent, and employers had added jobs for a record 113 months, while in March, the unemployment rate was just 4.4 per cent.

President Donald Trump, who faces the prospect of high unemployment rates through the November election, said the figures were “no surprise”.

He said: “What I can do is I’ll bring it back. Those jobs will all be back, and they’ll be back very soon. And next year we’ll have a phenomenal year.”

Massachusetts U.S. Army National Guard soldier Colleen Bearce, of Hanover, Mass., right, organises crates and gallon containers of milk. Credit: AP

But economists increasingly worry that it will take years to recover all the jobs lost. The nonpartisan Congressional Budget Office expects the jobless rate to be 9.5 per cent by the end of 2021.

Racial minorities and lower-income workers suffered the most from the economic shutdown. Job losses were especially severe for Latinos, whose unemployment rate leapt up to 18.9 per cent from 6 per cent in March.

In addition to the millions of new unemployed, 5.1 million others had their hours reduced in April.

A homeless man carrying his bedding walks past a closed shop in Miami. Credit: Lynne Sladky/AP

That means less income will mean less spending, which will only heighten the economic downturn in the US.

The US is not the only country to be hit by job losses and pay cuts.

Unemployment in the 19-country eurozone is expected to surpass 10 per cent in coming months as more people are laid off.

That figure is expected to remain lower than the US unemployment rate. But it doesn’t count many people who either are furloughed or whose hours are cut but who receive most of their wages from government assistance.