Labor department estimate: U.S. payrolls contracted 701,000 in March

Nonfarm payrolls contracted 701,000 in the United States in March as the coronavirus outbreak affected restaurants, retailers and other businesses.

The unemployment rate rose to 4.4 percent, a nine-tenths of a point increase that tied for the largest one-month gain since 1975.

While the latest Labor Department estimates accounted for some of the effects of the outbreak, they predated additional closures and stay-at-home orders that occurred in the second half of March. A record 6.6 million workers filed for their first week of unemployment benefits in the week ending March 28.

For the March labor report, the number of people counted among those unsuccessfully looking for work for less than five weeks rose 2 million to 3.5 million. The number of those out of work for 27 weeks or longer was little changed at 1.2 million. Another 5.8 million people were counted among those working part-time because their hours had been cut or they were unable to find full-time jobs.

The labor participation rate declined seven-tenths of a point to 62.7 percent.

Layoffs were spread out among industry sectors, although the leisure and hospitality sector was hit hardest with a 459,000 decrease in employment. Payrolls dropped 417,000 in restaurants and drinking places.

Employment decreased 61,000 in health care and social assistance, 52,000 in business and professional services, 46,000 in retail trades, 29,000 in construction and 18,000 in manufacturing.

The payroll drop for March follows gains in January and February. The initial estimate for gains in January were revised downward 59,000 to 214,000. The estimate for February was revised upward 2,000 to 275,000.

For March, the average workweek for employees on private, nonfarm payrolls fell two-tenths of an hour to 34.2 hours. The average manufacturing work week shortened three-tenths of an hour to 40.4 hours. Average hourly wages rose 10 cents to $24.07.