By Kim Mackrael and Eric Morath
The economic upheaval caused by the coronavirus pandemic had a
devastating but uneven impact on the U.S. labor market last month,
leaving more than one in five workers jobless in Nevada, Michigan
and Hawaii, government data showed Friday.
Nevada had the highest unemployment rate at 28.2%, the Labor
Department said Friday, followed by Michigan and Hawaii, both above
22%. Rates were among the lowest in Minnesota and Nebraska at
slightly more than 8%.
Unemployment rose in all 50 states and the District of Columbia,
and in 43 states the rate was the highest in records going back to
1976. The national unemployment rate rose in April to 14.7%, which
was the highest in records back to 1948.
The report highlights the toll that the pandemic and related
lockdowns took on states that depend on industries such as tourism
and manufacturing, while causing less damage in the middle of the
country, where cases of Covid-19, the illness caused by the virus,
were fewer. In total, U.S. employers cut more than 20 million jobs
in April.
In Nevada, nearly a quarter of the state's labor force was
employed in the hospitality and leisure industry before the
pandemic began, according to the Labor Department. That industry,
which normally employs about 350,000 in the state, lost roughly 40%
of its workforce in March and April.
"Nevada remains among the least diversified economies of its
size in the country," said Jeremy Aguero, a principal analyst with
Las Vegas-based economic research firm Applied Analysis.
Mr. Aguero said the downturn in tourism has rippled out to
affect hotel and restaurant suppliers and other businesses that
depend on hospitality workers spending their earnings locally.
Nevada Gov. Steve Sisolak ordered casinos to close March 17,
effectively shutting down the tourism industry. State regulators
have said casinos will be limited to 50% occupancy when they
reopen, but they haven't announced a date.
Las Vegas resident John Polhemus, 47 years old, said he was let
go in early April from an executive position at a specialty foods
company that typically does 85% of its business with restaurants in
casinos.
"We saw an unprecedented change in our business model," after
the state closed casinos, Mr. Polhemus said. He said business was
strong before the pandemic began. "All of that stopped."
Hawaii faced similar challenges. Employment in leisure and
hospitality, which accounted for about one in five jobs last year,
declined by 56% in April, according to the Labor Department.
The state's $18 billion tourism industry slowed dramatically in
March after travel from Asia dropped off and the Trump
administration recommended Americans avoid unnecessary travel.
Hawaii has recently reopened car dealerships and shopping malls,
but visitors from outside the state must still undergo a 14-day
quarantine after they arrive.
Carey Johnson, whose Custom Island Tours business offers driving
tours around the Hawaiian island of Oahu, said he laid off seven
employees and closed down temporarily in March.
Mr. Johnson, 53, said he hopes to open up again once the state
allows it, and once the quarantine period for out-of-state visitors
is lifted. Until then, he said, "there are no tourists here to give
tours to."
States that are heavily dependent on manufacturing also saw big
job losses. Auto makers General Motors Co., Ford Motor Co. and Fiat
Chrysler Automobiles all closed plants in Michigan mid-March,
causing a ripple effect of layoffs at suppliers in the state and
elsewhere. Michigan's employment in manufacturing industries fell
28% in April, according to Labor Department data.
Auto makers on Monday began restarting their U.S. factories,
though two later were halted, one due to a worker's illness and the
other due to a parts shortage.
Gabriel Ehrlich, an economist at the University of Michigan,
said the auto industry tends to be hit particularly hard during
economic downturns because it is easier for people to delay buying
a new vehicle compared with other, more urgent expenses.
"We were forecasting Michigan would be above the national
unemployment rate for that reason," Mr. Ehrlich said. He said the
state has a relatively high burden of illness and deaths related to
the coronavirus pandemic, which may also have contributed to
exceptionally high unemployment.
More than 5,100 people in Michigan have reportedly died after
contracting Covid-19, according to data from Johns Hopkins
University.
In Washington state, the unemployment rate rose to 15.4% in
April from 5.1% in March. Boeing Co. closed its largest
Seattle-area factory temporarily in late March after about two
dozen workers in the region tested positive for the new coronavirus
and one person died. Boeing didn't layoff workers during the
closure, but some of the company's suppliers did.
Tristan Nisbet, 33, said he was laid off from his job at an
aerospace parts company in Kirkland, Wash., on April 10, after
contracts from Boeing and other customers dried up. He said he's
getting unemployment benefits but is worried about what will happen
when extended medical coverage from his union ends. "I hope to get
back to work as soon as possible," Mr. Nisbet said.
Boeing has warned of future layoffs, because declining air
travel has lowered demand for jetliners.
Connecticut had the lowest unemployment rate last month at 7.9%,
according to Labor Department data. Still, officials at the state's
Labor Department said that figure likely understates joblessness
because of difficulties in collecting surveys. They said the rate
may be closer to 17.5%.
A spokesman for the U.S. Bureau of Labor Statistics declined to
comment on the data for Connecticut but referred to a previous
statement that while the response rate to its survey "was adversely
affected by pandemic-related issues," the department "was still
able to obtain estimates that met our standards for accuracy and
reliability."
Nonfarm payrolls fell in every state in April, according to the
Labor Department. The largest declines occurred in populous states:
California lost 2.3 million jobs; New York, 1.8 million; and Texas,
1.3 million. The states with the largest percentage declines were
Michigan at 22.8%; Vermont, 19.6%; and New York, 18.8%.
New York has the highest number of Covid-19 cases and related
deaths among U.S. states, according to the Centers for Disease
Control and Prevention.
The unemployment rate represents the people without jobs but
actively seeking employment as a share of a state's overall labor
force. Separate Labor Department data show that many people who
recently lost jobs dropped out of the labor force because they were
either not seeking work or were unable to report to a job in
mid-April, the period covered by the survey.
Write to Kim Mackrael at kim.mackrael@wsj.com and Eric Morath at
eric.morath@wsj.com
(END) Dow Jones Newswires
May 22, 2020 16:41 ET (20:41 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.