Almost All Job Growth From Great Recession Recovery Has Now Been Wiped Out as Jobless Rate Hits 14.7 Percent

The U.S. unemployment rate is the worst since the Great Depression, hitting 14.7 percent for April, according to Labor Department numbers released Friday, and the worst may be yet to come.

The latest numbers show that almost all the job growth that came during the recovery from the Great Recession has now been wiped out, according to the Associated Press.

The job losses happened at a breakneck speed, resulting from the coronavirus's rapid spread throughout the country. The previous unemployment rate, 3.5 percent, was a historic 50-year low and a hallmark of the Trump administration.

Unemployment application
Unemployment forms at a drive-through collection point outside the John F. Kennedy Library in Hialeah, Florida, on April 8. CHANDAN KHANNA/Getty Images

During the Great Recession of 2008-2009, the economy shrank by 6.5 percent over two years. It was the nation's worst recession since 1945.

According to a Federal Reserve Bank of St. Louis report, unemployment could hit 30 percent or more if the joblessness rate doesn't begin to level off soon.

Last month, the Federal Reserve surveyed nearly 4,000 nonprofits, financial institutions, government agencies and other community-based organizations, gauging the impact of the virus outbreak on their communities.

According to the survey:

  • Nearly 7 out of 10 respondents indicated that the virus was a significant disruption to the economic conditions of the communities they serve and said recovery is expected to be difficult.
  • Income loss, business impacts, health concerns and basic consumer needs were the most frequently cited impacts of the virus.
  • Over one-third of respondents indicated it will take longer than 12 months for their communities to return to conditions that existed before the virus's disruption.
  • Twenty-five percent of respondents indicated their entity could operate for less than three months in the current environment before experiencing financial distress.

The Trump administration passed a $2.2 trillion relief bill in March in an effort to help American workers during the pandemic, but experts say the aid isn't coming fast enough.

"We don't have the administrative systems to get $2.2 trillion into the economy in three weeks," said Claudia Sahm, director of macroeconomic policy at the Washington Center for Equitable Growth, according to Bloomberg. "What we have right now is a race between the virus wreaking havoc on the economy and the relief trying to get out."

Despite the dire news, there may be some signs that an economic recovery could start sooner than later. Applications for unemployment have been declining for five weeks, signaling that layoffs have probably subsided, the AP reported.

However, that hope will hinge on whether the virus outbreak surges back in a second wave, as many fear, and as states begin to slowly reopen their economies.

Harvard economics professor Raj Chetty said small-business owners are keeping an eye on the economic picture, which could indicate that Americans are feeling more comfortable about returning to restaurants, shops and other small businesses.

Last month, Texas Governor Greg Abbott announced that some businesses, including restaurants and movie theaters, could reopen at 25 percent capacity on May 1, followed by gyms, hair salons and barbershops on May 8.

This is a developing story and will be updated as more information becomes available.