Total non-farm payroll employment fell by 20.5 million in April, and the unemployment rate rose to 14.7%, the U.S. Bureau of Labor Statistics reported today. The changes in these measures reflect the effects of the coronavirus (COVID-19) pandemic and the Trump Administration’s lack of efforts to contain it – since it was going to go away in April. Wrong. It shut the country down. And the grim news is based on data from only the first two weeks of April. The worst is yet to come.
Employment fell sharply in all major industry sectors. There were particularly heavy job losses in leisure and hospitality where the spread was initially ignored as Washington slept – until people, now former customers stopped traveling or died. This was out of self-preservation as the corpses mounted in non-living color on the news and in statistical counts no matter what Trump and Pence said. It was also the result of some Democratically-controlled states where shelter in place was imposed out of concern for the health of residents and not for the health of the increasingly infected Trump reelection campaign.
Household Survey Data*
In April, the unemployment rate increased by 10.3 percentage points to 14.7%. This is the highest rate and the largest over-the-month increase in the history of the survey with seasonally adjusted data available back to January 1948. The number of unemployed persons rose by 15.9 million to, gulp, 23.1 million in April as breadlines formed and soup kitchens were swamped. Americans were out of work and going hungry.
In April, unemployment rates rose sharply among all major worker groups. The rate was 13.0% for adult men, 15.5% for adult women, 31.9% for teenagers, 14.2% for Whites, 16.7% for Blacks, 14.5% for Asians, and 18.9% for Hispanics. The rates for all of these groups, with the exception of Blacks, represent record highs for their history.
The number of unemployed persons who reported being on temporary layoff increased about ten-fold to18.1 million in April. The number of permanent job losers increased by 544,000 to 2.0 million. In April, the number of unemployed persons who were jobless less than 5 weeks increased by 10.7 million to 14.3 million, accounting for almost two-thirds of the unemployed. The number of unemployed persons who were jobless 5 to 14 weeks rose by 5.2 million to 7.0 million. The number of long-term unemployed (jobless for 27 weeks or more), at 939,000, declined by 225,000 over the month and represented 4.1% of the unemployed.
The labor force participation rate decreased by 2.5 percentage points over the month to only 60.2%, the lowest rate since January 1973 (when it was 60.0%). Total employment, as measured by the household survey, fell by 22.4 million to 133.4 million. The employment-population ratio, at 51.3%, dropped by 8.7-percentage points over the month. This is the lowest rate and largest over-the-month decline in the history of the survey (seasonally adjusted data available back to January 1948).
The number of persons who usually work full time declined by 15 million over the month, and the number who usually work part time declined by 7.4 million. Part-time workers accounted for one-third of the over-the-month employment decline.
The number of persons at work part time for economic reasons nearly doubled over the month to 10.9 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. This group includes persons who usually work full time and persons who usually work part time.
The number of persons not in the labor force who currently want a job, at 9.9 million, nearly doubled in April. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.
Persons marginally attached to the labor force – a subset of people not in the labor force who currently want a Job – numbered 2.3 million in April, up by 855,000 over the month. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. Discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, numbered 574,000 in April, little changed from the previous month.
Establishment Survey Data*
Total non-farm payroll employment fell by 20.5 million in April, after declining by 870,000 in March. The April over-the-month decline is the largest in the recorded history and brought employment to its lowest level since February 2011 (data go back to 1939). Job losses in April were widespread, with the largest employment decline occurring in leisure and hospitality
In April, employment in leisure and hospitality plummeted by 7.7 million, or 47% as previously noted. Almost three-quarters of the decrease occurred in food services and drinking places (-5.5 million). Employment also fell in the arts, entertainment, and recreation industry (-1.3 million) and in the accommodation industry (-839,000).
Employment declined by 2.5 million in education and health services in April. In health care, employment declined by 1.4 million, led by losses in offices of dentists (-503,000), offices of physicians (-243,000), and offices of other health care practitioners (-205,000). Employment also declined in social assistance (-651,000), reflecting job losses in child day care services (-336,000) and individual and family services (-241,000). Employment in private education declined by 457,000 over the month.
Professional and business services shed 2.1 million jobs in April. Sharp losses occurred in temporary help services (-842,000) and in services to buildings and dwellings (-259,000).
- employment in retail trade declined by 2.1 million. Job losses occurred in clothing and clothing accessories stores (-740,000),
- motor vehicle and parts dealers (-345,000),
- miscellaneous store retailers (-264,000),
- and furniture and home furnishings stores (-209,000).
- By contrast, the component of general merchandise stores that includes warehouse clubs and super-centers gained 93,000 jobs.
In April, manufacturing employment dropped by 1.3 million. About two-thirds of the decline was in durable goods manufacturing (-914,000), which saw losses in motor vehicles and parts (-382,000) and in fabricated metal products (-109,000). Non-durable goods manufacturing lost 416,000 jobs. Employment in the other services industry declined by 1.3 million in April, with nearly two-thirds of the decline occurring in personal and laundry services (-797,000).
- Government employment dropped by 980,000 in April. Employment in local government was down by 801,000, in part reflecting school closures. Employment also declined in state government education (-176,000).
- Construction employment fell by 975,000 in April, with much of the loss in specialty trade contractors (-691,000). Job losses also occurred in construction of buildings (-206,000).
- Employment fell in transportation and warehousing in April (-584,000). Transit and ground passenger transportation and air transportation lost 185,000 jobs and 141,000 jobs, respectively.
- Wholesale trade shed 363,000 jobs in April, largely reflecting losses in the durable and non-durable goods components.
- Employment in financial activities fell by 262,000 over the month, with the vast majority of the decline occurring in real estate and rental and leasing (-222,000).
- Employment in information fell by 254,000 in April, driven by a decline in motion picture and sound recording industries (-217,000).
- Mining lost 46,000 jobs in April, with most of the decline occurring in support activities for mining (-33,000).
In April, average hourly earnings for all employees on private non-farm payrolls increased by $1.34 to $30.01. Average hourly earnings of private-sector production and non-supervisory employees increased by $1.04 to $25.12 in April. The increases in average hourly earnings largely reflect the substantial job loss among lower-paid workers; this change, along with earnings increases, put upward pressure on the average hourly earnings estimates.
The average workweek for all employees on private non-farm payrolls increased by 0.1 hour to 34.2 hours in April. In manufacturing, the workweek declined by 2.1 hours to 38.3 hours, and overtime declined by 0.9 hour to 2.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls increased by 0.1 hour to 33.5 hours.
The change in total non-farm payroll employment for February was revised down by 45,000 from +275,000 to +230,000, and the change for March was revised down by 169,000 from -701,000 to -870,000. With these revisions, employment changes in February and March combined were 214,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)
*BLS on Why are there two monthly measures of employment?
The household survey and establishment survey both produce sample-based estimates of employment, and both have strengths and limitations.
- The establishment survey employment series has a smaller margin of error on the measurement of month-to- month change than the household survey because of its much larger sample size. An over-the-month employment change of about 100,000 is statistically significant in the establishment survey, while the threshold for a statistically significant change in the household survey is about 500,000.
- However, the household survey has a more expansive scope than the establishment survey because it includes self-employed workers whose businesses are unincorporated, unpaid family workers, agricultural workers, and private household workers, who are excluded by the establishment survey. The household survey also provides estimates of employment for demographic groups.
For more information on the differences see: https://www.bls.gov/web/empsit/ces_cps_trends.htm.