US Unemployment Surges To Highest Since Great Depression

The US Labor Department reported the largest one-month rise in unemployment since the Great Depression on Friday for April as the Coronavirus hit the economy. Unemployment was higher to 14.7%  This is a lagged report however and the past two jobless claims tells us job losses are much higher.

The US Labor Department reported the largest one-month rise in unemployment since the Great Depression on Friday for April as the Coronavirus hit the economy. Unemployment was higher to 14.7%  This is a lagged report however and the past two jobless claims tells us job losses are much higher.


April 2020 U.S. Employment Report

The Covid-19 virus has wreaked havoc on the global economy. The world’s economy as shut down and much of America has stay at home orders.The past two jobless claims numbers have been records and unfortunately the story is much worse as people have not all been able to file. The April report is a laggard report in that regard.

The market expected the April report released Friday to see nonfarm payrolls fall with the crashing economy in line with recent reports in weekly jobless and monthly employment growth at a consensus of 22 million losses. Last month it came in with losses of 701,000  Logic suggests more volatility in the hiring data.  Unemployment had come off a 49 year low with higher participation leaving a very shellshocked workforce before the Covid-19 lockdown..


US Jobs April 2020 


  • Non-farm payrolls -20,500k vs -22,000K expected, Prior -701K (revised to -870k)
  • Unemployment rate 14.7% vs 16.1% expected/prior 4.4%
  • Participation rate 60.2% vs 62.7% prior (63.3% highest since 2014)
  • Underemployment rate 8.7% vs 8.7 % prior
  • Two month net revision  -214k Prior -57k
  • Manufacturing payrolls -1330k vs -18k prior
  • Private payrolls -19520k vs -713k prior


  • Average hourly earnings +4.7% m/m v +0.3% m/m Prior/Expected
  • Average hourly earnings +7.9% y/y vs 3.1 % exp
  • Average weekly hours  34.2 v 34.2 prev

Coronavirus (COVID-19) Impact on March 2020 (and April) Establishment and Household Survey Data

March data from the establishment and household surveys broadly reflect some of the early effects of the coronavirus (COVID-19) pandemic on the labor market. We cannot precisely quantify the effects of the pandemic on the job market in March. However, it is clear that the decrease in employment andhours and the increase in unemployment can be ascribed to effects of the illness and efforts to contain the virus. It is important to keep in mind that the March survey reference periods for both surveys predated many coronavirus-related business and school closures in the second half of the mon

US Jobs Apr 2020 Earnings by Industry

Household Survey Data

In April, the unemployment rate increased by 10.3 percentage points to 14.7 percent. This is the highest rate and the largest over-the-month increase in the history of the series (seasonally adjusted data are available back to January 1948). The number of unemployed persons rose by 15.9 million to 23.1 million in April. The sharp increases in these measures reflect the effects of the coronavirus pandemic-and efforts to contain it. 

In April, unemployment rates rose sharply among all major worker groups. The rate was 13.0 percent for adult men, 15.5 percent for adult women, 31.9 percent for teenagers, 14.2 percent for Whites, 16.7 percent for Blacks, 14.5 percent for Asians, and 18.9 percent for Hispanics. The rates for all of these groups, with the exception of Blacks, represent record highs for their respective series.

Reuters Graphic

 The number of unemployed persons who reported being on temporary layoff increased about ten-fold to 18.1 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 (those jobless for 27 weeks or more), at 939,000, declined by 225,000 over the month and represented 4.1 percent of the unemployed.

The labor force participation rate decreased by 2.5 percentage points over the month to 60.2 percent, the lowest rate since January 1973 (when it was 60.0 percent). Total employment, as measured by the household survey, fell by 22.4 million to 133.4 million. The employment-population ratio, at 51.3 percent, 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 series (seasonally adjusted data are available back to January 1948).

Reuters Graphic

The number of persons whousually work full time declined by 15.0 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.

ersons marginally attached to the labor force—a subset of persons 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.

US Jobs Apr 2020 Industry

Establishment Survey Data

Total nonfarm 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 history of the series and brought employment to its lowest level since February 2011 (the series dates 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 plummetedby 7.7 million, or 47 percent. 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). In April, 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 supercenters 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). Nondurable goods manufacturing shed 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 nondurable goods components. -4-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 nonfarm payrolls increased by $1.34 to $30.01. Average hourly earnings of private-sector production and nonsupervisory 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 nonfarm 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 nonfarm 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.)

The Employment Situation for May is scheduled to be released on Friday, June 5, 2020, at 8:30 a.m. (EDT)

Source: AFP, Challanger, DOL, TradersCommunity Data, BLS

From The TraderCommunity Research Desk

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