Nonfarm payroll employment falls by 701,000 in March; unemployment rate rises to 4.4%

Source: U.S. Bureau of Labor Statistics

Economic News Release USDL-20-0521

Employment Situation Summary
Transmission of material in this news release is embargoed until 8:30 a.m. (EDT) Friday, April 3, 2020

Technical information:
Household data: cpsinfo@bls.gov * www.bls.gov/cps
Establishment data: cesinfo@bls.gov * www.bls.gov/ces

Media contact: (202) 691-5902 * PressOffice@bls.gov


THE EMPLOYMENT SITUATION -- MARCH 2020


Total nonfarm payroll employment fell by 701,000 in March, and the unemployment rate rose to 4.4 percent, the U.S. Bureau of Labor Statistics reported today. The changes in these measures reflect the effects of the coronavirus (COVID-19) and efforts to contain it. Employment in leisure and hospitality fell by 459,000, mainly in food services and drinking places. Notable declines also occurred in health care and social assistance, professional and business services, retail trade, and construction.

This news release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry. Note that the March survey reference periods for both surveys predated many coronavirus-related business and school closures that occurred in the second half of the month. For more information about the concepts and statistical methodology used in these two surveys, see the Technical Note.

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. (See table A-1. 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 at the end of this news release.)

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. (See tables A-1, A-2, and A-3.)

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. (See table A-11.)

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. (See table A-12.)

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. (See table A-1.)

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. (See table A-8.)

In March, 1.4 million persons were marginally attached to 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. (See Summary table A.)

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. (See table B-1. Measures from the establishment survey pertain to the pay period including March 12th; pay periods may be weekly, bi-weekly, semi-monthly, or monthly. For more information about the establishment survey reference period and how survey operations were affected by the coronavirus, see the box note at the end of this news release.)

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 a.m. (EDT).


________________________________________________________________________________

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
and hours 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
month.

In the household survey, individuals are classified as employed, unemployed,
or not in the labor force based on their answers to a series of questions
about their activities during the survey reference week (March 8th through
March 14th). Workers who indicate they were not working during the entire
survey reference week and expect to be recalled to their jobs should be
classified as unemployed on temporary layoff. In March 2020, there was an
extremely large increase in the number of persons classified as unemployed
on temporary layoff.

However, there was also a large increase in the number of workers who were
classified as employed but absent from work. Special instructions sent to
household survey interviewers just before data collection started for March
called for all employed persons absent from work due to coronavirus-related
business closures to be classified as unemployed on temporary layoff.
However, it is apparent that not all such workers were so classified. Such
a misclassification is an example of nonsampling error and can occur when
respondents misunderstand questions or interviewers record answers
incorrectly.

If the workers who were recorded as employed but absent from work due to
"other reasons" (over and above the number absent for other reasons in a
typical March) had been classified as unemployed on temporary layoff, the
overall unemployment rate would have been almost 1 percentage point higher
than reported. However, according to usual practice, the data from the
household survey are accepted as recorded. To maintain data integrity, no
ad hoc actions are taken to reclassify survey responses.

In the establishment survey, workers who are paid by their employer for all
or any part of the pay period including the 12th of the month are counted
as employed, even if they were not actually at their jobs. Workers who are
temporarily or permanently absent from their jobs, but are not being paid,
are not counted as employed, even if they are continuing to receive benefits.
The length of the reference period does vary across the respondents in the
establishment survey; one-third of respondents have a weekly pay period,
slightly over 40 percent a bi-weekly, about 20 percent semi-monthly, and a
small amount monthly.

Data collection for both surveys was affected by the coronavirus. The
household survey is generally collected through in-person and telephone
interviews, but personal interviews were suspended during the collection
period for the safety of interviewers and respondents. The household survey
response rate, at 73 percent, was about 10 percentage points lower than in
recent months. In the establishment survey, about one-fifth of the data is
generally collected by telephone at four regional data collection centers.
Although these centers were closed during the collection period, efforts were
made to collect data electronically. The collection rate for the establishment
survey, at 66 percent, was about 9 percentage points lower than average.

More information is available at
www.bls.gov/cps/employment-situation-covid19-faq-march-2020.pdf.
________________________________________________________________________________

Read more: https://www.bls.gov/news.release/empsit.nr0.htm

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