U.S. nonfarm payrolls decrease much more than expected in March

The U.S. Labor Department announced on Friday that nonfarm payrolls decreased by 701,000 in March after an upwardly revised 275,000 gain in the prior month (originally an increase of 273,000). That was the first decline in payrolls since September 2010 and reflected the effects of the coronavirus and efforts to contain it.

According to the report, significant job drops in March occurred in leisure and hospitality (-459,000 jobs, mainly in food services and drinking places), health care and social assistance (-61,000), professional and business services (-52,000), retail trade (-46,000), and construction (-29,000).

The unemployment rate climbed to 4.4 percent in March from 3.5 percent in February. That was the highest level since August 2017.

Economists had forecast the nonfarm payrolls to decrease by 100,000 and the jobless rate to rise to 3.8 percent.

The labor force participation rate decreased by 0.7 percentage point to 62.7 percent in March, while hourly earnings for private-sector workers rose 0.4 percent m-o-m (+11 cents) to $28.62, following an unrevised 0.3 percent m-o-m gain in February. Economists had forecast a 0.2 percent m-o-m advance in the average hourly earnings. Over the year, average hourly earnings have increased by 3.1 percent, following an unrevised 3.0 percent rise in February.

The average workweek decreased by 0.2 hour to 34.2 hours in March, exceeding economists' forecast for 34.1 hours.