The unemployment rate in Massachusetts surged to 15.1 percent in April and 623,000 jobs disappeared after the state shut down nonessential businesses to stem the spread of the coronavirus, the Baker administration said Friday.
Last month’s jobless rate is the highest in record going back to 1976, and compares with a peak during the Great Recession of 8.8 percent. Employers cut nearly one in six jobs in the state during April, leaving payrolls at the lowest level since July 1996.
“This is an economic tsunami, the likes of which we have never seen,” said Donald Klepper-Smith,chief economist at DataCore Partners in New Haven.
The latest report doesn’t capture the full damage caused by the pandemic because of gaps in the way that job losses and unemployment rates are calculated. The monthly report is based on two surveys taken by the Census Bureau: one of employers for job counts, and another of households for employment status. The national results of both surveys are released two weeks before states post their own cut of the data.
“As bad as these numbers are, the payroll decline doesn’t include self-employed and gig workers,” said Alan Clayton-Matthews, an economist and professor at Northeastern University’s School of Public Policy and Urban Affairs. And the unemployment rate, he said, “doesn’t count hundreds of thousands who left the labor force.”
Moreover, the job market has deteriorated since the latest surveys were completed April 18. More than a half million people have sought unemployment pay in Massachusetts in the past four weeks.
Greg Sullivan, research director at the Pioneer Institute in Boston, estimates the state’s current unemployment rate to be more than 22 percent. It stood at 2.8 percent in March.
The national job market has held up modestly better than in Massachusetts. US unemployment rose to 14.7 percent in April, 0.4 percent below the Massachusetts level. Employers eliminated 20.5 million jobs, about 13.5 percent of the total.
The Labor Department said the true jobless rate last month could have been closer to 20 percent because of issues with the way workers are classified.
Thirteen states had higher unemployment than Massachusetts in April, including Rhode Island, at 17 percent, and Vermont, at 15.6 percent. Nevada, heavily dependent on tourism, had the steepest rate in the country at 28.2 percent.
Nearly 80 percent of laid-off workers nationally told survey-takers that they expect to be back at their jobs within a few months. But economists say millions of jobs are gone for good, especially in consumer-facing industries such as restaurants, retail, and entertainment, where people will be reluctant to gather in crowded places.
“In some hard-hit sectors, I wouldn’t be surprised to still see double-digit unemployment” at the end of the year, said Doug Butler, the director of research at Rockland Trust in Boston.
But he said he expects the overall jobless rate to rebound to under 10 percent by the start of the new year.
In Massachusetts, the labor force fell to 3.41 million in April, the smallest pool of workers since May 2006. The labor force participation rate — the total number of Massachusetts residents 16 or older who worked or were unemployed and actively sought work in the last four weeks — dropped to 60.3 percent from 67.5 percent a year earlier.
The state reported the following breakdown of industry sector job losses in April from March:
Leisure and hospitality: a loss of 216,200 jobs, or 61 percent of the sector’s total over the month.
Trade, transportation, and utilities: a loss of 112,700 jobs, or 19.5 percent.
Education and health services: a loss of 85,900 jobs, or 10.6 percent.
Construction: a loss of 60,000 jobs, or 37.1 percent.
Other services: a loss of 48,100 jobs, or 35.7 percent.
Professional, scientific, and business services: a loss of 45,600 jobs, or 7.5 percent.
Manufacturing: a loss of 21,400 jobs, or 8.8 percent.
Financial activities: a loss of 6,700 jobs, or 3 percent.
Information: a loss of 400 jobs, or 0.4 percent.
Government: a loss of 25,900 jobs, or 5.6 percent.