• Thomas Parker

Payrolls shed 701,000, unemployment rises

Nonfarm payrolls declined by 701,000 in March, according to a Department of Labor report released on Friday. It is the first decline in payrolls since September 2010, and not far off the financial crisis peak payrolls decline of 800,000 in May 2009.

A significant portion of the decline was in the hospitality industry, resulting from shutdowns of bars and restaurants during the coronavirus pandemic. One of the only sectors to have increased payrolls was the government, which hired 17,000 Census workers.

The unemployment rate rose to 4.4% from 3.5%, the highest it has been since 2017 as employers close their businesses and furlough or cut nonessential workers. A measure of discouraged workers and those holding part-time jobs who prefer a full-time job increased to 8.7% from 7%, also the highest level since 2017.

The labor force participation rate, which had been slowly increasing, dipped by 0.7 points to 62.7%, the lowest level since 2018.

The Bureau of Labor Statistics, which produces the report, used the week ending on March 12 as its point of reference for the entire month of March. Its methodology very likely underestimates the severity of the economic damage suffered during late March, when initial jobless claimed spiked to record highs, above 10 million in just two weeks.

“Today’s numbers are shockingly bad and an understatement of the damage already done to the U.S. economy,” said Nick Bunker, economic research director for job board website Indeed. “If this is an indication of what was happening before the full force of the crisis hit, then it will be hard to come up with the words to describe the numbers in future months.”

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