Nonfarm Payroll Jobs Decreased 98,400 Unemployment Rate Increased to 10.6 Percent in April

May 22, 2020

FOR IMMEDIATE RELEASE: May 22, 2020

Nonfarm Payroll Jobs Decreased 98,400 Unemployment Rate Increased to 10.6 Percent in April

AUGUSTA - The effects of COVID-19 on the labor market were widespread across sectors and regions of the state. Job losses were the sharpest on record for a month in April and for the two month period since February.

Seasonally Adjusted Estimates

Payroll Survey Estimates Employers in Maine reported sharp reductions in staffing in the April survey of employer payrolls. The estimated number of nonfarm jobs decreased by 98,400 in April, following a revised decrease of 7,200 jobs in March. The job loss was the largest on record for a one- or two-month period. The 16.6 percent decrease was slightly larger than the national 14 percent rate of job loss since February. The 531,700 nonfarm jobs in April was the lowest monthly total since July, 1994.

Job losses between February and April impacted every major industry sector. The largest decrease was in the leisure and hospitality sector, where 42,600 jobs were lost, which was 61 percent of jobs in that sector, and 40 percent of jobs lost in all sectors. The next largest job losses were in the healthcare and social assistance, retail trade, and manufacturing sectors. These four sectors accounted for three-quarters of jobs lost in the state in the last two months.

Job losses occurred throughout the state. Payroll survey estimates indicate that there was a slightly higher rate of job loss in the Portland-South Portland metro area, where there is a concentration of jobs in the hospitality, health care, and retail sectors that have been most impacted, and there is higher population density. The rate of job loss in the Bangor and Lewiston-Auburn metro areas was somewhat less than the statewide average, and the rate of loss in all non-metro areas combined was at the statewide average.

Household Survey Estimates - Findings from the survey of households also indicate employment decreased at record rates, though the change was not as dramatic as from the payroll survey. Data from this survey indicates the number of employed residents of the state declined by 77,300, and that the number of unemployed increased by 48,700 between February and April. The 10.6 percent unemployment rate for April was the highest on record, and the 7.4 percentage point increase was the largest for a one- or two- month period under the current estimating methodology, which was adopted in 1976.

The U.S. unemployment rate estimate for April of 14.7 percent was also the highest under the current estimating methodology, and the 11.2 percentage point increase was the largest for a two month period.

As sharp as the increase in unemployment is, it does not fully reflect the magnitude of job loss that has occurred, either in Maine or the U.S. This is because to be counted as unemployed a person must have engaged in work search activities in the previous four weeks and have been available to work. The pandemic disrupted the labor market in many ways, including preventing people who lost a job and wanted a new job from engaging in normal work search activities because of concerns for personal safety and because of stay at home orders issued in most states.

In Maine this resulted in 28,600 fewer people in the labor force than in February. If not for the pandemic preventing work search, these people would have been in the labor force. If they were counted as unemployed, the unemployment rate would have been higher in Maine and the nation in April.

Data from these surveys raises certain questions about how it is collected and produced, its accuracy, and how to reconcile seemingly different indications of workforce conditions. We have provided some context to this information in a blog, which we expect to update in response to patterns of questions we receive. Please contact us if you have questions or need clarification.

Regional Household Survey Estimates The April unemployment rate estimate for New England was 13.6 percent. Rates for other states in the region were 16.3 percent in New Hampshire, 15.6 percent in Vermont, 15.1 percent in Massachusetts, 17.0 percent in Rhode Island, and 7.9 percent in Connecticut.

Not Seasonally Adjusted Substate Estimates

Unemployment rates increased throughout the state. Increases generally were the largest in the most densely populated counties and smallest in the least densely populated counties, with some exceptions. The regional differential in unemployment rates in April is the lowest it has been in many years.

The not seasonally adjusted statewide unemployment rate estimate of 11.3 percent for April was up from 3.4 percent one year ago. Unemployment rates were lowest for Kennebec County (10.1 percent) and highest for Oxford County (14.0 percent). The largest over the year increases were in Oxford, Somerset, York, Knox, and Cumberland counties. The smallest increases were in Aroostook, Washington, Piscataquis, and Waldo counties. Rates were the highest on record for April in 12 counties (highs for Aroostook, Waldo, and Washington counties were in the early 1990s, and for Piscataquis was in 2009).

April unemployment rates were the highest on record for all three metro areas: Portland-South Portland (11.1 percent), Lewiston-Auburn (10.7 percent) and Bangor (10.3 percent).

May workforce estimates will be published Friday, June 19 at 10 a.m. Data Release Schedule - https://www.maine.gov/labor/cwri/releaseDates.html

This release is available here - https://www.maine.gov/labor/cwri/news/release.html

Labor force and unemployment data is available here - https://www.maine.gov/labor/cwri/laus1.html

Nonfarm payroll jobs data is available here - https://www.maine.gov/labor/cwri/ces1.html

Monthly workforce estimates are cooperatively produced and released by the Maine Department of Labor, Center for Workforce Research and the U.S. Department of Labor, Bureau of Labor Statistics.

NOTES

1. Preliminary seasonally-adjusted labor force estimates, including rates (labor force participation, employment, and unemployment rates), and levels (labor force, employed, and unemployed) tend to move in a direction for several months and then reverse course. Those directional trends are largely driven by a smoothing procedure and may not indicate a change in underlying workforce conditions. Annual revisions (published in March each year) tend to moderate or eliminate those directional patterns. A comparison of 2019 preliminary and revised estimates of labor force and unemployment rates, as well as nonfarm payroll jobs, is available at https://www.maine.gov/labor/cwri/blogs/2019workforcedata_revisions.pdf

2. The 90 percent confidence interval for statewide unemployment rates in 2020 is 0.5 to 0.7 percentage points above or below the published estimate each month.

3. To assess job growth, we recommend looking at nonfarm jobs from the payroll survey rather than resident employment from the household survey. The payroll survey is larger, has smaller margins of error, and is subject to smaller revisions. A 2016 blog on the differences in accuracy of the two measures provides more context at www.maine.gov/labor/cwri/blogs/imprecise_data.pdf

4. Nonfarm payroll jobs estimates tend to be volatile from month to month because there is variability in the sample of reporting employers and their representativeness for the universe of all employers. Additionally, seasonal adjustment is imperfect because weather, the beginning and ending of school semesters and holidays, and other events do not always occur with the same timing relative to the pay period of the 12th day of the month reference period, which can exacerbate monthly volatility. Users should look to the trend over multiple months rather than the change from one specific month to another. Estimates for the period from October 2019 to September 2020 will be replaced with actual payroll data in March 2021. Those benchmark revisions are likely to show less volatility than preliminary estimates.