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Economy in Brief

U.S. Nonfarm Payrolls Collapse; Jobless Rate Surges by Almost One Point
by Tom Moeller  April 3, 2020

The job market unwound during March. The figures in today's report derive from a survey taken three weeks ago and, therefore, miss the bulk of the recent layoff activity due to the coronavirus outbreak. Those numbers only take into account payroll activity through March 12, before the period of social distancing resulting from attempts to halt the coronavirus spread.

Nonfarm payroll employment declined 701,000 (+1.0% y/y) with the majority of the deterioration occurring in service-producing industries. The plunge in March came after a 275,000 total payroll increase in February, revised from 273,000. Payrolls rose 214,000 in January, revised from 273,000. A 100,000 fall had been expected in the Action Economics Forecast Survey.

Average hourly earnings in the private sector actually rose 0.4%, following an unrevised 0.3% February improvement. A 0.2% rise had been expected. Growth of 3.1% y/y remained below its 12-month peak of 3.5%.

The unemployment rate jumped to 4.4% last month. It was the highest level since August 2017. A rise to 3.8% had been expected. Employment in the household survey weakened 2.987 million while the labor force declined 1.663 million. The overall jobless rate, including those who were marginally attached or working part-time for economic reasons, increased to 8.7%, its highest level in three years.

The labor market data are contained in Haver's USECON database. Detailed figures are in the EMPL and LABOR databases. The expectations figures are in the AS1REPNA database.

Employment: (SA, M/M Change, 000s) Mar Feb Jan Mar Y/Y 2019 2018 2017
Payroll Employment -701 275 214 1.0% 1.4% 1.6% 1.6%
 Previous Estimate -- 273 273 -- -- -- --
  Manufacturing -18 13 -22 0.1 1.2 2.0 0.7
  Construction -29 41 38 2.2 2.8 4.6 3.6
  Private Service-Producing -659 185 166 1.0 1.4 1.5 1.8
  Government 12 33 35 0.9 0.6 0.5 0.4
Average Weekly Hours - Private Sector 34.2 34.4 34.3 34.5 34.4 34.5 34.4
Private Sector Average Hourly Earnings (%) 0.4 0.3 0.2 3.1 3.3 3.0 2.6
Unemployment Rate (%) 4.4 3.5 3.6 3.8 3.7 3.9 4.3
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