California’s unemployment rate nearly tripled from mid-March to mid-April because the country lost many jobs in all sectors of its economy.
The April unemployment rate jumped to 15.5%, up from 5.5% a month earlier, sweeping past the peak of the Great Recession of 12.3% a decade ago, state officials reported Friday.
Employers in the country’s most populous state lost 2.3 million unprecedented jobs in just a month, as a result of the COVID-19 pandemic that has made more than 88,000 Californians sick and caused more than 3,600 deaths in the state so far .
The Golden State unemployment rate is higher than the national level of 14.7%, which reflects California’s dependence on tourism, hospitality and entertainment businesses. To slow the spread of the corona virus, state and local governments shut down many of the businesses, and consumers who fear contracting the virus are hesitant to protect the rest.
“The rate of job loss is truly amazing,” said chief economist Scott Anderson of the Bank of the West in San Francisco. “We are basically wiping out job creation for a decade in a month and a half. I don’t think the size of the shock really hit people. “
And the pain will get worse. The unemployment data includes only workers who lost their jobs and were looking for work. But given the economic collapse, many do not see. In addition, since last month’s salary survey, which charted jobs until the week of April 12, California has seen 1.4 million new jobless claims, totaling 5.1 million, the California Department of Labor Development reported Thursday.
Given the new claims, the country’s unemployment rate is likely to reach 23% in May – about the level expected to peak during the Great Depression of the 1930s, Anderson said. “We are in uncharted territory.”
In addition, the coronavirus blow to the economy caused a decrease in tax revenues collected by state and local governments. If the federal government does not take steps with massive aid, economists warn, it will likely trigger a new wave of layoffs that affect public sector jobs.