Magazine article Economic Trends

The Employment Situation, April 2009

Magazine article Economic Trends

The Employment Situation, April 2009

Article excerpt



Nonfarm payroll employment declined by a less-than-expected 539,000 in April, boosted by federal government hiring and smaller-than-expected losses across many private industries. While still very large, the loss was the smallest since last October. Revisions to the data for the previous two months, however, continued to be on the downside, adding 66,000 additional losses to the earlier figures for February and March. Those months have now seen respective losses of 681,000 and 699,000, bringing total payroll losses since the start of the recession to 5.7 million.

The unemployment rate jumped from 8.5 percent to 8.9 percent in April, largely due to a labor force increase of 683,000 people, which pushed up the participation rate 0.3 percentage point to 65.8 percent. The employment-to-population ratio, often considered a more stable measure of labor market dynamics, remained at 59.9 percent.

The diffusion index of employment change, which tracks the percentage of industries that are increasing their employment, saw its largest monthly increase since September 2007, jumping from 20.3 to 28.2. This reading is still well below the 50 threshold, which would indicate an equal balance between industries with increasing and decreasing employment.

Goods-producing payrolls decreased by 270,000 in April, compared to average monthly losses of 322,000 for year-to-date 2009. Manufacturing and construction losses (-149,000, -110,000) were both the smallest seen for any month this year. Durable goods (-127,000) continued to be a heavier drag on the manufacturing figure than nondurable goods (-22,000). Within durable goods, motor vehicles and parts manufacturers alone were responsible for 29,000 of the payroll losses.

The private service-providing sector shed 341,000 jobs in April, after larger drops in February (-393,000) and March (-375,000). Of a the major service industries, only information (-17,000) and leisure and hospitality (-44,000) fared slightly worse than they had in March. Other service industries shed fewer jobs last month: Trade, transportation, and utilities lost 126,000, financial activities lost 40,000, and professional and business services dropped 122,000. Payroll losses in temporary help services lessened slightly but are still elevated compared to most months over the course of the recession. As has been the case over the past year, education and healthcare is the only service industry to add to payrolls, with a net gain of 15,000. The government sector experienced its largest monthly gain since June 2001, due to the hiring of 140,000 federal employees in preparation for the 2010 Census.


Total private sector employment dropped by a milder 611,000 jobs last month, compared to March's loss of 693,000. Still, monthly private-sector losses this year have been considerably worse for several months running compared to past recessions. The only months in the series with comparable losses were December 1974 and October 1949, which saw respective private sector losses of 629,000 and 814,000.

Labor Market Conditions and Revisions

                                          Average monthly change
                                     (thousands of employees, NAICS)

                                     February       to        March
                                     current     February    current

Payroll employment                     -681        -30         -699
  Goods-producing                      -295        -10         -318
    Construction                       -113         -6         -135
      Heavy and civil engineering      -7. … 
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