As expected, the Bureau of Labor Statistics reported job numbers Friday that everyone—including the bureau’s statisticians—knows have little relationship to our actual situation. That’s not a result of incompetence or manipulation. It’s because the two surveys the bureau uses to determine the March unemployment rate and how many jobs have been gained or lost were undertaken halfway through the month, as they always are. That makes the data in the just-released report three weeks old. The report covers the last half of February and the first half of March when the economic measures responding to the spread of the coronavirus had yet to be imposed by any state. Normally, the end of the month gap in data isn’t an issue because the numbers make relatively small changes month to month.
This time, however, as we know from the Labor Department’s reports on new claims for unemployment insurance in the last two weeks of March, nearly 10 million people are newly out of work who aren’t included in today’s BLS jobs report.The BLS calculated that, on a seasonally adjusted basis, 701,000 people lost their jobs in March and the headline unemployment rate rose from 3.5% to 4.4%. That puts the losses in the range of the first few months of 2009, when the Great Recession was raging. The U6—a BLS measure of both unemployed, underemployed, and discouraged workers—rose to 8.7% from 7% last month.
We won’t have a more realistic statistical picture of the job situation before the April report is released May 8. The BLS points out in a note:
March data from the establishment and household surveys broadly reflect some of the early effects of the coronavirus (COVID-19) pandemic on the labor market. We cannot precisely quantify the effects of the pandemic on the job market in March. However, it is clear that the decrease in employment and hours and the increase in unemployment can be ascribed to effects of the illness and efforts to contain the virus.
Justin Wolfers at The New York Times made calculations of his own: “At this point, our calculations show 16 million more people without work, for an unemployment rate of 13 percent.” That would put the rate 3 percentage points over the worst level of the Great Recession and the worst since the Great Depression, when unemployment hit an estimated 25% of the U.S. labor force in 1933. A number prominent experts have said unemployment could reach as high as 32% by summer. But, out of necessity, such projections are heavy on speculation. Here’s an example:
The reported losses announced today were more than expected, indicating that some coronavirus-related layoffs began sooner in the month than was thought. One note: average hourly earnings for all employees on private nonfarm payrolls increased by 11 cents to $28.62. That’s more significant than almost all monthly rises in wages since recovery from the Great Recession began. That boost could, however, be a consequence of mostly lower-wage workers being the first to be laid off in this crisis.
One important note. The Current Population Report—from phone interviews with 60,000 households—shows that 1.6 million people left the civilian labor force in March and that 2.987 million fewer Americans were employed based on interviews. But the BLS uses the Current Employment Statistics survey—based on reports from businesses—to determine the number of jobs gained or lost each month. In times of great change, the CPS shows the trends quicker than the CES.
March job gains and losses for selected categories. Like all the numbers in today’s report, these underestimate what’s actually happening in the economy, but they may show what the trends will be as the stay-at-home orders continue. Check out that leisure and hospitality number:
- Education and health services: -76,000
° Health care & social assistance: -61,200
- Professional and business services: -52,000
- Manufacturing: -18,000
- Temporary help services: 49,500
- Transportation & warehousing: -4,900
- Financial activities: -1,000
- Leisure & hospitality: -459,000
- Information: 2,000
- Retail trade: -46,200
- Construction: -29,000
- Mining and Logging: -7,000
- Government at all levels: 12,000