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US unemployment rate hits 14.7%

By SCOTT REEVES in New York | chinadaily.com.cn | Updated: 2020-05-08 23:18

US employers cut 20.5 million jobs in April as the coronavirus pandemic hit the economy and sent the unemployment rate to 14.7 percent – the highest since World War II, the Labor Department reported Friday.

"The sharp increases in these measures reflect the effects of the coronavirus pandemic and efforts to contain it," the Labor Department said in a statement.

The leisure and hospitality sector lost 7.7 million jobs, including 5.5 million in restaurants and bars. Retail, professional services and healthcare each lost about 2 million jobs.

In demographic groups, the unemployment rate for Hispanics rose 12.9 percentage points to 18.9 percent. For whites, blacks and Asians, the unemployment rate increased about 10 percentage points each, the Labor Department said.

Before the coronavirus hit, the US employment was at a 50-year high.

In February, the economy added 230,000 jobs and capped 11 years of expansion.

The so-called real unemployment rate, which includes those not seeking jobs and the under-employed, soared to 22.8 percent in April, government statistics show.

The Labor Department doesn't track workers who have had their hours cut or pay reduced, suggesting the economic damage may be worse.

April's unemployment rate exceeded the post-war record of 10.8 percent, but is less than the estimated high of 24.9 percent during the Great Depression of the 1930s.

Peak unemployment during the 2008-2009 financial crisis touched off by the collapse of the subprime mortgage market was 10 percent.

A strong economy with a robust job market was US President Donald Trump's strongest argument for re-election in November. It's unclear how the coronavirus-induced downturn will affect the election.

Most analysts don't expect a quick recovery. But 88 percent of those who lost their job in April said the layoff was temporary.

US markets shook off the Labor Department's report as investors bet on an economic rebound as states begin to reopen.

In early trading, the Dow Jones Industrial Average rose 322.21 points, or 1.43 percent, to 24,198.12. The S&P 500 gained 1.08 percent. The Nasdaq Composite added 0.76 percent.

West Texas Intermediate crude, the guide for US prices rose 3.23 percent in early trading to $24.31 a barrel. Brent crude, the worldwide benchmark, rose 2.61 percent to $30.23 a barrel.

Oil is a proxy for future economic activity. At the deepest point of the shutdown, oil prices turned negative for the first time in history.

Tesla said Friday it plans to start limited production of its electric vehicles Friday by calling back about 30 percent its workforce.

The company said it will provide training intended to limit spread of the coronavirus and follow safety protocols.

In a statement, CEO Elon Musk said: "I will be on the line personally helping wherever I can. However, if you feel uncomfortable coming back to work at this time, please do not feel obligated to do so. These are difficult times, so thanks very much for working hard to make Tesla successful!"

In early trading, Tesla's stock rose 1.30 percent to $790.21 a share.

Ride-hailing company Uber reported first quarter revenue of $3.54 billion and a net loss of $2.9 billion.

The company said ride volume is increasing after plunging in mid-April amid the coronavirus lockdown, but bookings nevertheless declined five percent from a year ago.

However, bookings for Uber's food delivery service, Eats, increased about 50 percent from the same period a year ago as more restaurants signed up and more people ordered food during the shutdown.

The company said retailers soon may be able to send packages using Uber's service.

The state of California sued Uber and Lyft, charging that both misclassified drivers as contractors rather than as employees to avoid paying health and other benefits.

Uber said it will fight the lawsuit in court.

"At a time when California's economy is in crisis with four million people out of work, we need to make it easier, not harder for people to quickly start earning," the company said in a statement.

In early trading, Uber's stock gained 7.37 percent to $33.21 a share.

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