Payroll Employment Down By 20.5 Million In April, California Hardest Hit State Amidst COVID Lockdowns

The U.S. Bureau of Labor Statistics (BLS) issued its official employment report for April—or, in this season of COVID-19, more appropriately, the unemployment report. The topline is that nonfarm payroll employment fell by 20.5 million jobs, with the unemployment rate jumping 10.3% to 14.7%, the highest one-month jump since these statistics started being tallied in 1948.

Some highlights from the monthly report show the extent of the damage the government shutdowns have had on working Americans.

Some 47% of the people who work in hospitality—hotels, restaurants, and bars—lost their jobs, with employment in this sector plummeting 7.7 million in one month.

Along with the large job losses comes this interesting bit of data from the BLS: “Average hourly earnings for all employees on private nonfarm payrolls increased by $1.34 to $30.01.” Pay up in a pandemic? Odd? The BLS explains, “The increases in average hourly earnings largely reflect the substantial job loss among lower-paid workers…” There, in the cold language of government reports is a hint at the emerging glaring divide we see between the relatively well-off elites wanting the government lockdowns to stay in place and average working Americans who are under tremendous financial pressure and need to get back to work.

The unemployment rate stood at 13% for adult men, 15.5% for women, 14.2% for Whites, 16.7% for Blacks, 14.5% for Asians and 18.9% for Hispanics. These are record highs for all groups except Blacks, reflecting the historical strong employment picture for this group prior to the virus hitting.

One hopeful note is that most of the job losses aren’t permanent—yet—with temporary layoffs comprising 18.1 million of the total in April while permanent layoffs were up 544,000 to 2 million.

Unsurprisingly, the labor force participation rate decreased by 2.5% in April to 60.2%, the lowest in 47 years.

Employment fell sharply in all major industry sectors with the total of unemployed Americans rising 15.9 million to 23.1 million.

Along with the previously noted job losses in hospitality, 2.5 million lost their jobs in the education and health care services as colleges closed and doctor and dentist offices shut their doors.

Professional and business services employment was down 2.1 million jobs with temp help being particularly hard hit, losing 842,000.

Retail employment was down 2.1 million jobs, with the one bright spot being an increase of 93,000 jobs in the big box stores as people shifted their stay-at-home shopping patterns.

Manufacturing lost 1.3 million jobs, mostly in durable goods manufacturing.

Personal and laundry services lost 797,000 jobs as people shut in ceased dropping clothes off at the dry cleaners and did their own laundry.

Even government shed jobs, with employment down by 980,000 in April, much of that due to school closures.

As construction sites across the nation were affected by government orders, construction jobs were down by 975,000. One side effect of the construction standstill is that home prices are up even though demand for new homes fells 8.5% in March, and the available supply of new homes fell even further.

The mining sector, which includes oil and gas, lost 46,000 jobs.

In a separate report released yesterday, the Department of Labor announced that a seasonally adjusted 3,169,000 people filed claims for unemployment in the week ending May 2, down 677,000 from the week before.

The three states with the largest increase in unemployment due to the virus and the government public health response are California, Oregon, and Michigan. At the other end of the spectrum, Florida, South Dakota, and Utah appear to have weathered the economic effects of the COVID-19 pandemic and response the best so far.

Of the 10 states with the highest share of unemployment claims, Vermont, Washington, Rhode Island, New York, Pennsylvania, Nevada, Georgia, Michigan, Oregon, and California, eight have Democrat governors with only Vermont and Georgia having Republicans in the governor’s mansion.

Of the 10 states with the lowest share of unemployment claims, Florida, South Dakota, Utah, Nebraska, Arizona, Wyoming, Colorado, Idaho, Maryland, and Arkansas, only Colorado has a Democrat governor, with the other nine led by Republicans.

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