MNI DATA REACT: US Sheds Record 20.5M Jobs in April

By Brooke Migdon

     WASHINGTON (MNI) - The U.S. economy lost 20.5 million jobs in April,

multiples above the record-high 800,000 jobs cut in March 2009 during the height

of the global financial crisis and marking the largest one-month decline in

history, the Bureau of Labor Statistics reported Friday.

     The employment rate spiked to a record high 14.7%, recalling the extent of

joblessness during the Great Depression. Markets had expected an even higher

rate of 16%. It rose above 4% in March for the first time in more than two

years. 

     Total private payrolls fell 19.5 million, driven by service-producing

industries like leisure and hospitality (down 7.7 million), education and health

services (down 2.5 million ), retail trade (down 2.1 million), and professional

and business services (down 2.1 million).

     Net revisions for the previous two months took away another 214,000 jobs,

bringing the three-month average level of payrolls growth to -896,667 through

April and highlighting the stark drop-off in hiring after the first U.S. cases

of the coronavirus were reported.

     --TRUE RATE STILL HIGHER

     The reported unemployment rate likely understates the virus damage as many

workers stopped looking for jobs amid the lockdown. Minneapolis Fed President

Neel Kashkari earlier this week said the true jobless rate could be as high as

23%. 

     If workers who were recorded as employed but absent from work due to "other

reasons" had been classified as "unemployed on temporary layoff," the overall

unemployment rate would have been almost 5 percentage points higher than

reported on a not seasonally adjusted basis, the BLS noted. 

     The labor force participation rate fell to 60.2% from 62.7% in March and

the employment-to population ratio dived nearly 10 percentage points to 51.3%

after dropping to 60% in March. The U-6 rate, a broader measure of

underemployment which accounts for discouraged workers, jumped to 22.8% from

8.7% in March. 

     BLS has also added several more detailed questions to the household survey

for May to further probe the extent of the virus impact on the labor market. 

     --EARNINGS SPIKE 

     Average hourly earnings for March added 4.7% after increasing by an

upwardly revised 0.5% in March. From a year earlier, earnings rose 7.9%. 

     The elimination of many lower wage positions accounted for the change. "The

increases in average hourly earnings largely reflect the substantial job loss

among lower-paid workers," the BLS said. "This change, along with earnings

increases, put upward pressure on the average hourly earnings estimates."

     The length of the average work week increased by one-tenth to 34.2 hours

from 34.1 in March.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

[TOPICS: MAUDS$,M$U$$$,MT$$$$]