- The unemployment rate surged to 14.7% in April, highest rate since the inception of this series in January 1948, and non-farm payroll employment dropped at a record rate of 20.5 million, according to the U.S. Bureau of Labor Statistics.
- Total non-farm payroll employment fell by 20.5 million in April, following a decrease of 870 thousand in the previous month, according to the U.S. Bureau of Labor Statistics. Private-sector payrolls decreased by 19.52 million in the month, while government employment decreased by 980 thousand. The changes in these measures reflect the effects of the coronavirus (COVID-19) pandemic and efforts to contain it. Employment fell sharply in all major industry sectors, with particularly heavy job losses in leisure and hospitality. The April over-the-month decline is the largest in the history of the series, from 1939, and brought employment to its lowest level since February 2011. Job losses in April were widespread, with the largest employment decline occurring in leisure and hospitality.
- In April, employment in leisure and hospitality plummeted by 7.7 million, or 47 percent. Almost three quarters of the decrease occurred in food services and drinking places (5.5 million). Employment also fell in the arts, entertainment, and recreation industry (1.3 million) and in the accommodation industry (839 thousand). Employment declined by 2.5 million in education and health services in April. In health care, employment declined by 1.4 million, led by losses in offices of dentists (503 thousand), offices of physicians (243 thousand), and offices of other health care practitioners (205 thousand). Employment also declined in social assistance (651 thousand), reflecting job losses in child day care services (336 thousand) and individual and family services (241 thousand). Employment in private education declined by 457 thousand over the month.
- Professional and business services shed 2.1 million jobs in April, while employment in retail trade declined by 2.1 million. In April, manufacturing employment dropped by 1.3 million. Employment in the other services industry declined by 1.3 million in April, with nearly two-thirds of the decline occurring in personal and laundry services (797 thousand). Construction employment fell by 975 thousand. Employment fell by 584 thousand in transportation and warehousing in April, while wholesale trade shed 363 thousand jobs. Employment fell by 262 thousand in financial activities, 254 thousand in information, and 46 thousand in mining.
- The average workweek of all employees on private nonfarm payrolls increased by 0.1 hour to 34.2 hours. Average hourly earnings increased by $1.34 cents to $30.01. Over the past 12 months, average hourly earnings were up 7.9%. BLS noted: “The increase in average hourly earnings largely reflect the substantial job loss among lower-paid workers; this change, along with earnings increases, put upward pressure on the average hourly earnings estimates.”
- The unemployment rate rose to 14.7% in April, from 4.4% in March. This is the highest rate and the largest over-the-month increase in the history of the series (seasonally adjusted data are available back to January 1948). The unemployment rate was 3.6% in April of 2019.
- The number of unemployed persons increased by 15.938 million to 23.078 million. The number of unemployed persons who reported being on temporary layoff increased about ten-fold to 18.1 million in April. The number of permanent job losers increased by 544 thousand to 2.0 million. The number of persons who usually work full time declined by 15.0 million over the month, and the number who usually work part time declined by 7.4 million. Part-time workers accounted for one-third of the over-the-month employment decline.
- In April, the number of unemployed persons who were jobless less than 5 weeks increased by 10.7 million to 14.3 million, accounting for almost two-thirds of the unemployed. The number of unemployed persons who were jobless 5 to 14 weeks rose by 5.2 million to 7.0 million. The number of long-term unemployed (those jobless for 27 weeks or more) declined by 225 thousand to 939 thousand in April and accounted for 4.1% of the unemployed.
- The labor force participation rate decreased by 2.5 percentage points to 60.2% in April, the lowest rate since January 1973 when it was 60.0%.
- The advance figure for initial claims for unemployment insurance decreased 677 thousand to 3,169 thousand in the week ending May 2. The 4-week moving average was 4,173.5 thousand, a decrease of 861.5 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending April 25 was 22,647 thousand, an increase of 4,636 thousand from the previous week’s revised level. The 4-week moving average was 17,097.75 thousand, an increase of 3,800.25 thousand from the previous week’s revised average. It was stated that: “The COVID-19 virus continues to impact the number of initial claims and insured unemployment. This report now includes information on claimants filing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims.”
- First quarter productivity decreased 2.5% (seasonally adjusted annual rate) in the non-farm business sector, following a 1.2% increase in the final quarter of 2019, according to the U.S. Bureau of Labor Statistics (BLS). Unit labor costs increased 4.8% in the first quarter of 2020, reflecting a 2.2% increase in hourly compensation and a 2.5% decrease in productivity. From the first quarter of 2019 to the first quarter of 2020, productivity increased 0.3%, as output increased 0.1%, and hours worked decreased 0.2%. The 2.5% decline in non-farm business sector labor productivity in the first quarter of 2020 was the largest quarterly decline since the fourth quarter of 2015, when output per hour decreased 2.9%. It reflects the largest decline in output since the first quarter of 2009 (6.5% decline) and the largest decline in hours worked since the third quarter of 2009 (4.4% decline). Productivity had increased in 15 of the 16 quarters between fourth-quarter 2015 and first-quarter 2020. BLS also stated: “BLS quarterly estimates of labor productivity combine output data with hours worked data based primarily on the Current Employment Statistics (CES) survey. The reference period for the CES largely predated many of the COVID-19-related job losses that occurred in the latter part of March. To capture these job losses, adjustments were made to March employment, based on the Department of Labor’s Employment and Training Administration weekly reports of the number of initial claims for unemployment insurance benefits. Hours and related measures—including labor productivity—for the first quarter of 2020 reflect these adjustments.”
- New orders for manufactured goods in March, down four of the last five months, decreased 10.3% to $445.8 billion, according to the U.S. Census Bureau, following a 0.1% decrease in the previous month. Shipments, down three consecutive months, decreased 5.2% to $473.6 billion. This followed a 0.3% February decrease. Unfilled orders, down following three consecutive monthly increases, decreased 2.0%. This followed a 0.1% February increase. The unfilled orders-to-shipments ratio was 6.57, down from 6.62 in February. Inventories decreased 0.8% to $693.5 billion, following a 0.4% decrease in the previous month. The inventories-to-shipments ratio was 1.46, up from 1.40 in February. It was stated: “Due to recent events surrounding COVID-19, many businesses are operating on a limited capacity or have ceased operations completely. The Census Bureau has monitored response and data quality and determined estimates in this release meet publication standards.”
- In March international trade in goods and services deficit was $44.4 billion, $4.6 billion more than the revised February figure, according to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis (BEA). March exports were $187.7 billion, $20.0 billion less than February exports. March imports were $232.2 billion, $15.4 billion less than February imports. Year-to-date international trade in goods and services deficit was $129.7 billion, compared with a deficit of $157.8 billion during the first three months of 2019. Year-to-date exports were $603.8 billion, compared with $625.5 billion during the same period in 2019. Year-to-date imports were $733.5 compared with $783.2 billion during the first three months of the previous year. The BEA stated: “The declines in March exports and imports were, in part, due to the impact of COVID-19, as many businesses were operating at limited capacity or ceased operations completely, and the movement of travelers across borders was restricted. The full economic effects of the COVID-19 pandemic cannot be quantified in the trade statistics for March because the impacts are generally embedded in source data and cannot be separately identified. The Census Bureau and the Bureau of Economic Analysis have monitored data quality and determined estimates in this release meet publication standards.”
- Consumer credit increased at a seasonally adjusted annual rate of 1.7% during the first quarter, according to the Board of Governors of the Federal Reserve System. Revolving credit decreased at an annual rate of 10.3%, while non-revolving credit increased at an annual rate of 6.0%. In March, consumer credit decreased at annual rate of 3.4% to $4,209.3 billion. Revolving credit decreased at an annual rate of 30.9% in March, while non-revolving credit increased at an annual rate of 6.2%.
- Construction spending during March 2020 was estimated at a seasonally adjusted annual rate of $1,360.5 billion, up 0.9% from February, according to the U.S. Census Bureau. The March figure was 4.7% above a year ago. During the first three months of this year, construction spending amounted to $297.0 billion, 6.7% above the $278.5 billion for the same period in 2019. In March, private construction increased 0.7%, while public construction increased 1.6%. Private residential construction increased 2.3% in March, while private nonresidential construction decreased 1.3%. Public residential construction increased 0.7% in March, while public nonresidential construction decreased 1.6%. The Census Bureau stated: “Due to recent events surrounding COVID-19, many governments and businesses are operating on a limited capacity or have ceased operations completely. The Census Bureau has monitored response and data quality and determined estimates in this release meet publication standards.”
- The home-ownership rate of 65.3% in the first quarter of 2020 was 1.1 percentage points higher than the rate in the first quarter 2019 (64.2%) but was not statistically different from the rate in the fourth quarter 2019 (65.1%), according to the U.S. Census Bureau. National vacancy rates in the first quarter 2020 were 6.6% for rental housing and 1.1% for homeowner housing. The rental vacancy rate of 6.6% was 0.4 percentage point lower than the rate in the first quarter 2019 (7.0%), but not statistically different from the fourth quarter 2019 (6.4%). The homeowner vacancy rate of 1.1% was 0.3 percentage point lower than the rate in the first quarter 2019 (1.4%) and the rate in the fourth quarter 2019 (also 1.4%).The results of Freddie Mac’s Primary Mortgage Market Survey showed mortgage rates ticked up slightly. 30-year fixed rate mortgage averaged 3.26% for the week ending May 7, up from a week earlier when it averaged 3.23%. A year-ago at this time, the 30-year fixed rate mortgage averaged 4.10%. 15-year fixed rate mortgage averaged 2.73%, down from last week when it averaged 2.77%. A year-ago at this time, the 15-year fixed rate mortgage averaged 3.57%.
- Mortgage applications increased 0.1% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 1, 2020.
- The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector contracted in April, and the overall economy contracted after 131st consecutive months of expansion. It was stated that “Comments from the panel were strongly negative (three negative comments for every one positive comment) regarding the near-term outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and continuing energy market recession. The PMI® indicates a level of manufacturing-sector contraction not seen since April 2009, with a strongly negative trajectory.”
- The Institute for Supply Management’s (ISM) non-manufacturing survey results indicated that economic activity in the non-manufacturing sector contracted in April for the first time since December 2009, ending a 122-month period of growth. Two non-manufacturing industries reported growth, while sixteen industries reported contraction in April.
- The Federal Reserve Bank of Philadelphia suspended the release of the state leading indexes indefinitely. It was stated that: “Given the sudden, extreme impact of the COVID-19 outbreak on initial unemployment claims in recent weeks, our researchers’ standard approach for estimating the six-month change in coincident indexes is not appropriate.”
- The Federal Reserve Bank continues to take measures to alleviate the negative effects of the virus.
- As of May 8th, there are over 3.872 million COVID-19 confirmed cases in the world, 270.118 thousand deaths, and 1,293.333 thousand recovered, according to Johns Hopkins University, Coronavirus Resource Center (access date and time: 5/8/2020, 9:40 am EST). In the United States, there are 1.257 million confirmed cases, 75.670 thousand deaths, and 195.036 thousand recovered cases. The world is struggling to control the spread of the virus.
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