Employment Blog May 2020

Nonfarm payroll employment declined by 20.5 million in April, and the unemployment rate increased to 14.7 percent, reflecting the widespread impact on the job market of the coronavirus (COVID-19) pandemic and efforts to contain it. Employment fell sharply in all major industry sectors, with a particularly large decline in the leisure and hospitality sector. This is detailed in Charts 1 and 2 below.

The response rate for the household survey continued to be adversely affected by pandemic-related issues, while that for the establishment survey returned to a normal range in April. In addition, there were changes to the estimation methods for the establishment survey to better account for the historic number of temporary or permanent business closures in April. Theimpacts of the pandemic on the household and payroll surveys are detailed in the April Employment Situation news release and accompanying materials (available on the BLS website at https://www.bls.gov/news.release/empsit.nr0.htm). For both surveys, we were able to obtain estimates that met BLS standards for accuracy and reliability.

The substantial job declines related to the coronavirus pandemic started in March, as payroll employment declined by 881,000, as revised. Job losses accelerated in April, as an additional 20.5 million jobs were lost. These April losses were pervasive across all industry sectors, and brought nonfarm employment to its lowest level since January 2011.

Employment in the leisure and hospitality industry decreased by 7.7 million in April, or 47 percent. Job losses in food services and drinking places accounted for nearly three quarters of the decline, as many restaurants and bars were closed or curtailed operations due to the coronavirus pandemic. Elsewhere in leisure and hospitality, employment was down by 1.3 million in the arts, entertainment, and recreation industry, and the number of jobs in the accommodation industry fell by 839,000.

Employment declined by 2.5 million in education and health services in April. Health care employment declined by 1.4 million, with decreases in offices of dentists (-503,000), offices of physicians (-243,000), offices of other health practitioners (-205,000), and hospitals (-135,000). Employment in social assistance decreased by 651,000 over the month, reflecting job cuts 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.

Employment in professional and business services declined by 2.2 million in April. Much of the overall decline occurred in temporary help services (-842,000). Employment also declined in services to buildings and dwellings (-259,000), computer systems design (-93,000), and architectural and engineering services (-85,000).

Employment in retail trade also decreased by 2.1 million over the month. Sizable job declines occurred in clothing stores (-740,000); motor vehicle and parts dealers (-345,000); miscellaneous store retailers (-264,000); furniture stores (-209,000); and sporting goods, hobby, book, and music stores (-185,000). By contrast, the component of general merchandise stores that includes warehouse clubs and supercenters added 93,000 jobs.

Manufacturing employment fell by 1.3 million in April, with about two-thirds of the decline occurring in the durable goods component (-914,000). Within durable goods, large decreases occurred in motor vehicles and parts (-382,000), fabricated metal products (-109,000), and machinery (-80,000). Employment in nondurable goods industries decreased by 416,000, including declines in food manufacturing (-86,000), printing and related support activities (-79,000), and plastics and rubber products (-66,000).

Employment in the other services industry also declined by 1.3 million in April, with nearly two-thirds of the loss occurring in personal and laundry services (-797,000).

In April, government employment declined by 980,000; local government employment was down by 801,000, partly reflecting school closures. Employment in state government education was down by 176,000.

Construction employment decreased by 975,000 in April, with large declines in specialty trade contractors (-691,000) and in construction of buildings (-206,000).

Employment in transportation and warehousing fell by 584,000 over the month, with notable decreases in transit and ground passenger transportation (-185,000) and in air transportation (-141,000).

Wholesale trade employment decreased by 363,000 in April, reflecting sizable declines in both the durable and nondurable goods components.

Over the month, employment in financial activities fell by 262,000, with most of the decline occurring in real estate and rental and leasing (-222,000).

Employment in information fell by 254,000 in April, driven largely by a decline in motion picture and sound recording industries (-217,000).

Mining employment decreased by 46,000 over the month, mostly in support activities for mining (-33,000).

Turning to the labor market indicators from the household survey, the unemployment rate increased by 10.3 percentage points to 14.7 percent in April. This is the highest unemployment rate and largest single-month change in the history of the series (seasonally adjusted data are available back to 1948). The number of unemployed people increased by 15.9 million to 23.1 million. Among the unemployed, a large increase occurred among people on temporary layoff; this group increased by 16.2 million in April to 18.1 million. The unemployment rate rose sharply for all of the major worker groups in April. 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.