The US Labor Department reported the largest one-month rise in unemployment since 1975 on Friday for March as the Coronavirus hit the economy. Unemployment was higher to 4.4% 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 1975 on Friday for March as the Coronavirus hit the economy. Unemployment was higher to 4.4% This is a lagged report however and the past two jobless claims tells us job losses are much higher.
March 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 March report is a laggard report in that regard.
Prior to this report American wages hit their highest levels in a decade at 3.4%, but had fallen back to 3.1% in January, lower than expected
The market expected the January report released Friday to see nonfarm payrolls fall with the crashing economy in line with recent reports in monthly employment growth at a consensus of 600,000 losses. Last month it came in with gains of 273,000 Logic suggests more volatility in the hiring data. Unemployment has come off a 49 year low with higher participation leaving a very shellshocked workforce.
Employment:
- Non-farm payrolls -701k vs -650K expected, Prior +273K
- Unemployment rate 4.4% vs 4.1% expected/prior 3.5%
- Participation rate 62.7% vs 63.4% expected.prior (63.3% highest since 2014)
- Underemployment rate 8.7% vs 7.0 % prior
- Two month net revision -57k
- Manufacturing payrolls -18k vs -12k expected
- Private payrolls -713k vs -660k expected,
Wages:
- Average hourly earnings +0.03% m/m v +0.2% m/m Prior/Expected
- Average hourly earnings +3.1% y/y vs 3.0 % exp
- Average weekly hours 34.2 v 34.1 exp
Coronavirus (COVID-19) Impact on March 2020 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
Household Survey Data
In March, the unemployment rate increased by 0.9 percentage point to 4.4 percent. This is the largest over-the-month increase in the rate since January 1975, when the increase was also 0.9 percentage point.
The number of unemployed persons rose by 1.4 million to 7.1 million in March. The sharp increases in these measures reflect the effects of the coronavirus and efforts to contain it.
Measures from the household survey pertain to the week of March 8th to March 14th. For more information about how the household survey and its measures were affected by the coronavirus, see the box note on page 5.)
In March, unemployment rates rose among all major worker groups. The rate was 4.0 percent for adult men, 4.0 percent for adult women, 14.3 percent for teenagers, 4.0 percent for Whites, 6.7 percent for Blacks, 4.1 percent for Asians, and 6.0 percent for Hispanics.
The number of unemployed persons who reported being on temporary layoff more than doubled in March to 1.8 million. The number of permanent job losers increased by 177,000 to 1.5 million.
The number of unemployed persons who were jobless less than 5 weeks increased by 1.5 million in March to 3.5 million, accounting for almost half of the unemployed. The number of long-term unemployed (those jobless for 27 weeks or more), at 1.2 million, was little changed in March and represented 15.9 percent of the unemployed.
The labor force participation rate, at 62.7 percent, decreased by 0.7 percentage point over the month. Total employment, as measured by the household survey, fell by 3.0 million to 155.8 million, and the employment-population ratio, at 60.0 percent, dropped by 1.1 percentage points over the month.
The number of persons employed part time for economic reasons, at 5.8 million, increased by 1.4 million in March. 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.
In March, 1.4 million persons were marginally attachedto the labor force, little changed from the previous 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 514,000 in March, up by 109,000 from the previous month.
Establishment Survey Data
Total nonfarm payroll employment fell sharply in March (-701,000), reflecting the effects of the coronavirus and efforts to contain it. About two-thirds of the drop occurred in leisure and hospitality, mainly in food services and drinking places. Notable employment declines also occurred in health care and social assistance, professional and business services, retail trade, and construction. In the prior 12 months, nonfarm employment growth had averaged 196,000 per month.
In March, employment in leisure and hospitality fell by 459,000. Most of the decline occurred in food services and drinking places (-417,000); this employment decline nearly offset gains over the previous 2 years. Employment in the accommodation industry also declined in March (-29,000).
Employment in health care and social assistance fell by 61,000 in March. Health care employment declined by 43,000, with job losses in offices of dentists (-17,000), offices of physicians (-12,000), and offices of other health care practitioners (-7,000). Over the prior 12 months, health care employment had grown by 374,000. In March, social assistance saw an employment decline of 19,000, reflecting a job loss in child day care services (-19,000). Over the prior 12 months, social assistance added 193,000 jobs.
Employment in professional and business services decreased by 52,000 in March, with the decline concentrated in temporary help services (-50,000). Employment also decreased in travel arrangement and reservation services (-7,000). In March, employment in retail trade declined by 46,000. Job losses occurred in clothing and clothing accessories stores (-16,000); furniture stores (-10,000); and sporting goods, hobby, book, and music stores (-9,000). General merchandise stores gained 10,000 jobs.
Employment decreased over the month in construction (-29,000). In March, nonresidential building (-11,000) and heavy and civil engineering construction (-10,000) lost jobs. Construction employment had increased by 211,000 over the prior 12 months. Employment in the other services industry declined by 24,000 in March, with about half of the loss occurring in personal and laundry services (-13,000).
Over the prior 12 months, other services had added 89,000 jobs. Mining lost 6,000 jobs in March, with much of the decline occurring in support activities for mining (-5,000). Since a recent peak in January 2019, mining employment has declined by 42,000. In March, manufacturing employment edged down (-18,000). Over the past 12 months, employment in the industry has shown little net change.
Federal government employment rose by 18,000 in March, reflecting the hiring of 17,000 workers for the 2020 Census. Employment in other major industries, including wholesale trade, transportation and warehousing, information, and financial activities, changed little over the month. In March, average hourly earnings for all employees on private nonfarm payrolls increased by 11 cents to $28.62.
Over the past 12 months, average hourly earnings have increased by 3.1 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 10 cents to $24.07 in March. (See tables B-3 and B-8.) The average workweek for all employees on private nonfarm payrolls fell by 0.2 hour to 34.2 hours in March. The decline in the average workweek was most pronounced in leisure and hospitality, where average weekly hours dropped by 1.4 hours.
In manufacturing, the workweek declined by 0.3 hour to 40.4 hours, and overtime declined by 0.2 hour to 3.0 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.3 hour to 33.4 hours. (See tables B-2 and B-7.)
The change in total nonfarm payroll employment for January was revised down by 59,000 from +273,000 to +214,000, and the change for February was revised up by 2,000 from +273,000 to +275,000. With these revisions, employment gains in January and February combined were 57,000 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.) After revisions, job gains averaged 245,000 per month for January and February.
The Employment Situation for April is scheduled to be released on Friday, May 8, 2020, at 8:30
Source: AFP, Challanger, DOL, TradersCommunity Data, BLS
From The TraderCommunity Research Desk