Unemployment Rates During the COVID-19 Pandemic (R46554, Version 10, Updated April 14, 2021)

Summary

In Version 10, updated April 14, 2021, this Congressional Research Service report drops the In Brief title and expands beyond unemployment rates to labor force participation rates and nonfarm payrolls. It reports that the unemployment rate reached 14.8% in April 2020 and remained higher in March 2021 (6.0%) than in February 2020 (3.5%). The labor force participation rate declined to 60.2% in April 2020, a level not seen since the early 1970s, before partially recovering to 61.5% in March 2021. Nonfarm payrolls shed 22.1 million jobs between January and April 2020, with employment declining to 86% of its pre-recession level.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Unemployment Rates During the COVID-19
Pandemic

Updated April 14, 2021

Congressional Research Service
https://crsreports.congress.gov
R46554
SUMMARY

R46554
Unemployment Rates During the COVID-19
April 14, 2021
Pandemic
Gene Falk, Coordinator
The Coronavirus Disease 2019 (COVID-19) pandemic has had a significant effect on Specialist in Social Policy
labor market metrics for every state, economic sector, and major demographic group in
the United States. This report provides information on unemployment rates, labor force Paul D. Romero
participation rates, and nonfarm payrolls in the United States during the ongoing Research Assistant
pandemic. It presents CRS analysis of overall unemployment rate trends during the
pandemic. The report first examines these trends nationally, and at the state and Jameson A. Carter
industrial levels. Next, it examines how unemployment rates varied across demographic Research Assistant
groups. The report then repeats this analysis, where appropriate, for the labor force
participation rate, which sheds light on the size of the workforce willing and available Isaac A. Nicchitta
for work. The final portion of the report analyzes the impact the pandemic has had on Research Assistant
overall employment and by sector.
Emma C. Nyhof
Among other findings, this report shows the following: Research Assistant

 In April 2020, the unemployment rate reached 14.8%—the highest rate observed
since data collection began in 1948. In March 2021, unemployment remained
higher (6.0%) than it had been in February 2020 (3.5%).
 The labor force participation rate declined to 60.2% in April 2020—a level not seen since the
early 1970s—before partially recovering in March 2021 (61.5%).
 Nonfarm payrolls shed 22.1 million jobs between January 2020 and April 2020, with employment
declining to 86% of its pre-recession level. In March 2021, aggregate employment remained 8.1
million jobs below its pre-recession level.
 The COVID-19 pandemic has impacted economic sectors disparately. The leisure and hospitality
sector lost the largest number of jobs since January 2020, and persons last employed in this sector
have consistently exhibited some of the highest unemployment rates throughout the pandemic.
Additionally, the education and services sector and the government sector have exhibited the
second and third-largest losses in jobs since January 2020, despite relatively low unemployment
rates among persons last employed in these sectors.
 The COVID-19 pandemic has impacted demographic groups disparately. Although all
demographic groups were affected, persons identifying as Black or Hispanic and younger
workers generally experienced relatively high peaks in unemployment and relatively steep
declines in labor force participation over the course of the pandemic. Additionally, persons with
lower educational attainment have generally experienced relatively higher unemployment rates
and lower labor force participation throughout the pandemic.

Congressional Research Service
Unemployment Rates During the COVID-19 Pandemic

Contents
Introduction ................................................................................................................... 1
U.S. Unemployment Rate: Historical Trends ....................................................................... 2
Comparing the Great Recession and the COVID-19 Recession ......................................... 4
COVID-19 Recession: Unemployment Trends..................................................................... 5
Unemployment Rates by State..................................................................................... 5
Unemployment Rates by Sector ................................................................................... 6
Unemployment Rates for Full- and Part-Time Workers.................................................... 9
Unemployment Rates by Sex and Age .......................................................................... 9
Unemployment Rates by Racial Group and Hispanic Ethnicity ....................................... 10
Unemployment Rates by Education ............................................................................ 12
U.S. Labor Force Participation Rate: Historical Trends ....................................................... 13
COVID-19 Recession: Trends in Labor Force Participation ................................................. 14
Labor Force Participation Rate by Age and Sex ............................................................ 15
Labor Force Participation Rate by Race and Ethnicity ................................................... 16
Labor Force Participation Rate by Educational Attainment ............................................. 18
COVID-19 Recession: Nonfarm Payrolls .......................................................................... 18
Trends in Employment in the Private Sector ................................................................ 19
Trends in Employment by Government Sector ............................................................. 20
Data Limitations and Caveats.......................................................................................... 21
COVID 19 Pandemic-Related Data Issues ................................................................... 22
General Data Caveats ............................................................................................... 23

Figures
Figure 1. Historical Unemployment Rate ............................................................................ 3
Figure 2. U.S. Unemployment Rate.................................................................................... 4
Figure 3. Monthly State Unemployment Rate ...................................................................... 6
Figure 4. Unemployment Rates by Sector ........................................................................... 8
Figure 5. Monthly Unemployment Rates for Part- and Full-Time Workers ............................... 9
Figure 6. Monthly Unemployment Rates by Sex and Age .................................................... 10
Figure 7. Unemployment Rates by Racial Group................................................................ 11
Figure 8. Monthly Unemployment Rates by Hispanic Origin ............................................... 12
Figure 9. Monthly Unemployment Rates by Education ....................................................... 13
Figure 10. Historical Labor Force Participation Rate .......................................................... 14
Figure 11. Labor Force Participation Rate During COVID-19 Pandemic................................ 15
Figure 12. Labor Force Participation Rate by Age and Sex .................................................. 16
Figure 13. Labor Force Participation Rate by Race............................................................. 17
Figure 14. Labor Force Participation Rate by Hispanic Origin .............................................. 17
Figure 15. Labor Force Participation Rate by Educational Attainment ................................... 18
Figure 16. Change in Employment by Sector ..................................................................... 19
Figure 17. Job Loss During the COVID-19 Recession in the Private Sector............................ 20

Congressional Research Service
Unemployment Rates During the COVID-19 Pandemic

Figure 18. Job Loss During the COVID-19 Recession in the Public Sector............................. 21

Contacts
Author Information ....................................................................................................... 23

Congressional Research Service
Unemployment Rates During the COVID-19 Pandemic

Introduction
The National Bureau of Economic Research declared the start of the current economic downturn
in February 2020, marking the end of the longest period of expansion in U.S. history. 1 This
expansion followed the Great Recession (December 2007 to June 2009), a downturn widely
considered to be the worst since the Great Depression (August 1929 to March 1933). 2 The
unemployment rate rose quickly in March 2020, and by April 2020 it had greatly surpassed its
previous peaks observed during and just after the Great Recession. This rise in unemployment
was caused by an unprecedented loss of 22.1 million jobs between January 2020 and April 2020.
Many individuals left the labor force over this period, and by April 2020 the labor force
participation rate3 declined to a level not seen since the early 1970s.
This deterioration in the U.S. labor market corresponded with various advisory or mandated stay-
at-home orders implemented in response to the Coronavirus Disease 2019 (COVID-19) pandemic
and other pandemic-related factors affecting U.S. demand. 4 States and localities implemented
these orders 5 to mitigate the risks of COVID-19 after it was declared a pandemic disease by the
World Health Organization on March 11, 2020. 6
This report discusses the state of the U.S. labor market using data from the Bureau of Labor
Statistics (BLS). The three primary sources are the Current Population Survey (CPS), the Local
Area Unemployment Statistics (LAUS) program, and the Current Employment Statistics (CES)
program. In addition to the usual caveats about estimates (see the “General Data Caveats”
section), there were additional data challenges caused by the COVID-19 pandemic (see the
“COVID-19 Pandemic-Related Data Issues” section). The pandemic led to lower survey response
rates by businesses and households, and BLS detected an error in their categorization procedures
that likely underestimated unemployment early in the recession. 7 Labor force participation rates
were not affected by this categorization error and met BLS standards of accuracy, despite
depressed response rates. 8 Recently, BLS identified an error in the nonfarm enrollment data

1
T he National Bureau of Economic Research; see https://www.nber.org/cycles.html for their historical series of
expansions and contractions. For more on their process for determining expansions and contractions, see
https://www.nber.org/cycles/recessionsfaq.html#:~:text=
What%20is%20an%20expansion%3F,more%20than%20a%20few%20months.& text=
Expansion%20is%20the%20normal%20state,economy%3B%20most%20recessions%20are%20brief .
2 T he Great Recession was a particularly long recession, characterized by a steady and large increase in unemployment

and unprecedented decreases in labor force participation. T he unemployment rates observed during the Great
Recession, however, never surpassed those of the early 1980s. For more on labor force metrics during the Great
Recession see CRS Report R45330, Labor Market Patterns Since 2007, by Sarah A. Donovan and Marc Labonte.
3 Defined as the percentage of persons in t he overall adult population who either have a job or are looking for a job.

4
See CRS Insight IN11388, COVID-19: U.S. Economic Effects, by Rena S. Miller and Marc Labonte.
5 For a list of state-level stay-at-home orders and estimates of the impact of these orders on risk mitigation, see Amanda

Moreland, Christine Herlihy, and Michael A. T ynan et al., Timing of State and Territorial COVID-19 Stay-at-Home
Orders and Changes in Population Movement, Centers for Disease Control, Morbidity and Mortality Weekly Report
Vol. 69 No. 35, Washington, DC, September 4, 2020, pp. 1198 -1203, https://www.cdc.gov/mmwr/volumes/69/wr/
mm6935a2.htm?s_cid=mm6935a2_w.
6 World Health Organization, Coronavirus Disease 2019 (COVID-19), Situation Report 51, March 11, 2020, p. 1,

https://www.who.int/docs/default-source/coronaviruse/situation-reports/20200311-sitrep-51-covid-19.pdf.
7
See CRS Insight IN11456, COVID-19: Measuring Unemployment, by Lida R. Weinstock.
8 For BLS impact summaries of COVID-19 on these measures, see https://www.bls.gov/covid19/effects-of-covid-19-

pandemic-and-response-on-the-employment-situation-news-release.htm.

Congressional Research Service 1
Unemployment Rates During the COVID-19 Pandemic

processing system wherein some businesses were improperly included in estimates, although the
impacts of this error are yet to be evaluated. 9
This report generally finds the following:
 The unemployment rate peaked10 in April 2020, at a level not seen since data
collection started in 1948, before declining to a level in March 2021 that still
remained 2.5 percentage points above the rate observed in February 2020.
 In April 2020, the labor force participation rate declined to levels not seen since
the early 1970s.
 Nonfarm payrolls shed 22.1 million jobs between January 2020 and April 2020.
In March 2021, aggregate employment remained 8.1 million jobs below its pre-
recession level.

U.S. Unemployment Rate: Historical Trends
Prior recessions typically developed with gradually increasing economic distress. The current
recession was caused by the COVID-19 pandemic, which was an abrupt and exogenous shock to
the economy. The pandemic resulted in rapidly implemented efforts to limit contact among
individuals and many shutdown orders. Therefore, the trends in the unemployment rate in the
current recession differ from those in prior recessions (see Figure 1). Rates observed during prior
recessions rose relatively gradually over the course of an economic downturn and then peaked.
The current recession exhibited an unprecedented sharp increase in the unemployment rate (10.3
percentage points) from February to April 2020. 11 Following April, the rate declined rapidly (6.4
percentage points from April 2020 to August 2020) as temporarily furloughed workers returned to
work. Despite these rapid declines, the unemployment rate remains at an elevated level (6.0%)
compared to February 2020. The share of workers on furlough has declined since peaking in April
2020, while the share of permanently laid off workers has steadily increased. 12 Although
economic projections have generally improved since early in the recession, the Congressional
Budget Office (CBO) has projected that unemployment rates over 5.0% will persist over the next
two years. 13

9
For a description of this error, see https://www.bls.gov/ces/notices/2021/ces-sample-rotation-issue-caused-by-
pandemic-related-challenges-to-enrollment.htm.
10 T hroughout this report, peak refers to the highest level of unemployment between January 2020 and March 2021. It

does not account for months outside this range.
11
For information on the differences between the congressional response to the current recession compared to the
congressional response during the Great Recession in the Unemployment Insurance system, see CRS Report R46472,
Comparing the Congressional Response to the Great Recession and the COVID-19-Related Recession: Unemployment
Insurance (UI) Provisions, by Katelin P. Isaacs and Julie M. Whittaker.
12 CRS analysis of BLS data, which can be found at https://www.bls.gov/webapps/legacy/cpsatab11.htm. Workers on

temporary layoff declined from 18.0 million in April 2020 to 2.0 million in March 2021 as the number of permanent
job losers increased from 2.0 million in April 2020 to 3.4 million in March 2021.
13 See https://www.cbo.gov/about/products/budget-economic-data#4 for CBO’s 10-year economic projections of

unemployment rates, as of February 2021.

Congressional Research Service 2
Unemployment Rates During the COVID-19 Pandemic

Figure 1. Historical Unemployment Rate
Seasonally adjusted monthly data from January 1948 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: Shaded regions indicate recessionary periods as identified by the National Bureau of Economic Research.

The unemployment rate’s relatively rapid decline since April 2020 may have been aided by laws
passed in response to both the recession and the pandemic. Notably, Congress has passed three
rounds of stimulus checks for families, 14 expanded nutrition assistance programs,15 and enacted
increases in refundable tax credits. 16 These provisions increased families’ disposable income and
may have increased consumer spending, enabling businesses to better endure the recession; a
2020 study from NBER found that higher replacement rates of lost wages led to higher consumer
spending. 17 Congress also enacted the Paycheck Protection Program, which provides loans that
can be fully forgiven if the majority of funds are used to maintain payrolls. 18
Additionally, Congress expanded Unemployment Insurance (UI) program benefits and extended
length of coverage. 19 This policy could directly increase the unemployment rate because past
research has shown UI extensions can increase the duration of unemployment for a relatively

14 For more information, see CRS Insight IN11605, COVID-19 and Direct Payments: Comparison of First and Second

Round of “Stimulus Checks” to the Third Round in the American Rescue Plan Act of 2021 (ARPA; P.L. 117 -2), by
Margot L. Crandall-Hollick.
15
For more information, see CRS Report R46681, USDA Nutrition Assistance Programs: Response to the COVID-19
Pandemic, by Randy Alison Aussenberg and Kara Clifford Billings.
16
For more information, see CRS Report R46680, The American Rescue Plan Act of 2021 (ARPA; P.L. 117 -2): Title
IX, Subtitle G—Tax Provisions Related to Promoting Economic Security, by Molly F. Sherlock, Margot L. Crandall-
Hollick, and Jane G. Gravelle.
17 Miguel G. Casado, Britta Glennon, and Julia Lane, et al., The Effect of Fiscal Stimulus: Evidence from COVID-19,

NBER, Working Paper 27576, Cambridge, MA, August 2020, https://www.nber.org/papers/w27576.
For more on this topic and theories of recessionary policy, also see CRS Report R46460, Fiscal Policy and Recovery
from the COVID-19 Recession, by Jane G. Gravelle and Donald J. Marples.
18
For more information, see CRS Report R46397, SBA Paycheck Protection Program (PPP) Loan Forgiveness: In
Brief, by Robert Jay Dilger and Sean Lowry.
19 For more information, see CRS Report R46687, Current Status of Unemployment Insurance (UI) Benefits:

Permanent-Law Programs and COVID-19 Pandemic Response, by Julie M. Whittaker and Katelin P. Isaacs.

Congressional Research Service 3
Unemployment Rates During the COVID-19 Pandemic

small segment of unemployed workers. 20 A recent paper examining data from April to July of
2020 found that while UI benefit increases reduced employment by 0.2% to 0.4%, overall
spending by recipients increased by 2.0% to 2.6%. 21 The authors note that while these expansions
directly decreased employment among recipients, that increased spending among recipients may
have insulated the labor market from further deterioration.
These (and other) policies may have affected unemployment rate trends in several ways; however,
the causal impact of policy choices on the unemployment rate is beyond the scope of this report.

Comparing the Great Recession and the COVID-19 Recession
During the Great Recession, the unemployment rate increased from 5.0% in December 2007 (the
start of the recession) to 9.5% in June 2009 (the end of the recession) (see Figure 2). The
unemployment rate peaked at 10.0% in October 2009, four months after the recession officially
concluded. In the current recession, the unemployment rate increased from 3.5% in February
2020, to 4.4% in March 2020, and then peaked at a high of 14.8% in April 2020. Since then, the
unemployment rate fell to 6.0% in March 2021. The peak represents the quickest month-over-
month increase in the unemployment rate and the highest overall unemployment rate since the
CPS data started being collected in 1948. 22

Figure 2. U.S. Unemployment Rate
Seasonally adjusted monthly data from November 2004 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.

20 T he study cited here showed that UI extensions during Great Recession increased the unemployment rate of 0.4

percentage points. Henry S. Farber and Robert G. Valletta, Do Extended Unemployment Benefits Lengthen
Unemployment Spells? Evidence from Recent Cycles in the U.S. Labor Market, NBER, Working Paper 19048,
Cambridge, MA, May 2013, https://www.nber.org/papers/w19048.
21 Peter Ganong et al., Spending and Job Search Impacts of Expanded Unemployment Benefits: Evidence from

Administrative Micro Data, Becker Friedman Institute, Working Paper No. 2021 -19, Chicago, IL, February 2021,
https://bfi.uchicago.edu/wp-content/uploads/2021/02/BFI_WP_2021-19.pdf.
22 T here are many differences in labor force statistics observed during the Great Recession, its aftermath, and the

COVID-19 recession. For more on this and for information on labor market patterns since 2007, see CRS Report
R45330, Labor Market Patterns Since 2007, by Sarah A. Donovan and Marc Labonte.

Congressional Research Service 4
Unemployment Rates During the COVID-19 Pandemic

COVID-19 Recession: Unemployment Trends
The COVID-19 pandemic has affected the unemployment rates for every state, economic sector,
and major demographic group. In the early stages of the current recession, unemployment rates
disproportionately increased among economic sectors delivering in-person services. Some
demographic groups are overrepresented in such sectors, contributing to higher unemployment
rates for those workers.23

Unemployment Rates by State
Figure 3 displays state-level monthly unemployment rates from January 2020 to February 2021
(the data for March and April 2021 have not been released as of the cover date of this report). The
figure shows that no state was immune from economic damage early in the pandemic. 24 Since the
onset of the current recession, the unemployment rate for every state and the District of Columbia
surpassed levels seen during the Great Recession. The variation in economic damage was due to a
number of factors, including the proportion of jobs in sectors that provide non-essential services
to in-person customers, 25 individual concerns of contracting COVID-19 causing declines in
personal consumption, 26 and the implementation of stay-at-home orders and business closure
policies. 27

23
Guido Matias Cortes and Eliza Forsythe, “ T he Heterogeneous Labor Market Impacts of the Covid-19 Pandemic,”
Upjohn Institute, May 2020; and Robert Fairlie, “T he Impact of Covid-19 on Small Business Owners: Evidence of
Early-Stage Losses from the April 2020 Current Population Survey,” NBER Working Paper No. 27309, June 2020.
24
Felipe Lozano-Rojas et al., “Is the Cure Worse than the Problem Itself? Immediate Labor Market Effects of COVID -
19 Case Rates and School Closures in the U.S.,” NBER Working Paper No. 27127, May 2020; Eliza Forsythe et al.,
“Labor Demand in the T ime of COVID-19: Evidence from Vacancy Postings and UI Claims,” NBER Working Paper
No. 27061, April 2020.
25 Matthew Dey and Mark Loewenstein, “How many workers are employed in sectors directly affected by COVID-19

shutdowns, where do they work, and how much do they earn?” Monthly Labor Review, April 2020.
26 Austan Goolsbee and Chad Syverson, “Fear, lockdown, and diversion: comparing drivers of pandemic economic

decline 2020,” NBER Working Paper No. 27432 , June 2020.
27 Sumedha Gupta et al., “Effects of Social Distancing Policy on Labor Market Outcomes,” NBER Working Paper No.

2780, May 2020.

Congressional Research Service 5
Unemployment Rates During the COVID-19 Pandemic

Figure 3. Monthly State Unemployment Rate
Non-seasonally adjusted monthly data, January 2020 to February 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: The National Bureau of Economic Research identified February of 2020 as the first month of the current
recession. The month-over-month changes are point estimates and have not been tested for significance. The
data for March and April 2021 have not been released as of the cover date of this report.

The unemployment rate in most states peaked in April 2020 and has since declined. In February
2021, the states with the highest unemployment rates were Hawaii (9.2%), New York (8.9%),
California (8.5%), Connecticut (8.5%), and Nevada and New Mexico (both at 8.3%). The states
with the lowest unemployment rates in February 2021 were South Dakota (2.9%), Utah (3.0%),
Nebraska (3.1%), Vermont (3.1%), and Kansas (3.2%).

Unemployment Rates by Sector
Figure 4 displays the change in sector unemployment rates from January 2020, before the start of
the recession, to March 2021. Sector unemployment rates define the unemployment rate among
individuals whose last job was in a particular sector. The figure shows that some sectors were
disparately impacted by the recession, although the data are not seasonally adjusted. Without
seasonal adjustments, it is difficult to determine the extent to which unemployment trends are
related to the recession or to seasonal trends. Readers should interpret trends shown in Figure 4
with some caution as this report does not test for statistical significance of these differences.
Workers whose last job was in the leisure and hospitality sector experienced a higher peak in
unemployment (39.3% in April 2020) than did workers who were previously employed in any
other sector; they also had the second highest unemployment rate in March 2021 (13.0%).
However, elevated unemployment rates are not constrained to sectors providing in-person

Congressional Research Service 6
Unemployment Rates During the COVID-19 Pandemic

services. Workers whose last job was in the mining or extraction sector have experienced steadily
increasing unemployment since the onset of the recession; in March 2021 they exhibited the
highest rate (15.0%) among all workers across sectors. The lowest March 2021 rates were among
workers whose last job was in the government (2.7%), financial activities (3.4%), or education
and health services (3.8%) sectors. These sectors have had unemployment rates below 15% from
February 2020 through March 2021.28 Within sectors, some workers were more likely to lose
their jobs than others early in the recession. For example, some studies from early in the
pandemic suggest that low-wage workers in the leisure and hospitality sector and other services
sectors experienced disproportionately large employment losses. 29

28 T hese data are not seasonally adjusted and do not account for the likely seasonal variation in employment within the

education and health services sector.
29 Alexander Bartik et al., “ Measuring the labor market at the onset of the COVID-19 crisis,” NBER Working Paper

No. 27613, July 2020; and Guido Matias Cortes and Eliza Forsythe, “ T he Heterogeneous Labor Market Impacts of the
Covid-19 Pandemic,” Upjohn Institute Working Paper, May 2020.

Congressional Research Service 7
Unemployment Rates During the COVID-19 Pandemic

Figure 4. Unemployment Rates by Sector
Non-seasonally adjusted monthly data, January 2020 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: Statistical significance is not calculated for these trends and it is unclear how dependent these trends are
on regular seasonal variation. Sectors are defined by the North American Industry Classification System (NAICS)
and can be found at https://www.bls.gov/iag/tgs/iag_index_naics.htm. The figure shows unemployment rates for
wage and salary workers.

Congressional Research Service 8
Unemployment Rates During the COVID-19 Pandemic

Unemployment Rates for Full- and Part-Time Workers
As shown in Figure 5, part-time workers experienced a higher peak unemployment rate (24.5%
in April 2020) than full-time workers (12.8% in April 2020). This disparity has closed as the
recession has progressed, as the unemployment rate for part-time workers in March 2021 (5.8%)
is less than the unemployment rate for full-time workers (6.1%).
There are a few reasons why part-time workers’ apparent economic recovery since April may not
reflect the realities they face. First, some workers who last worked part-time jobs may have left
the labor force, and hence are not counted in the official unemployment statistics used in this
report. It is unclear whether that is the case. Additionally, there was a considerable increase in the
number of part-time workers who reported that they would have preferred to work full-time but
work part-time because their hours were reduced or they could only find part-time jobs. 30 This
could be reflected as a reduced unemployment rate among part-time workers. Further, BLS has
observed that labor underutilization has remained elevated for workers, including those who have
been working part-time for economic reasons. 31

Figure 5. Monthly Unemployment Rates for Part- and Full-Time Workers
Seasonally adjusted monthly data, January 2020 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: Both groups experienced their peak unemployment rate in April 2020.

Unemployment Rates by Sex and Age
As seen in Figure 6, unemployment rates tended to increase more for younger workers and were
higher for women early in the recession. Between February and April 2020, the rate for women
ages 16-19 increased by 25.3 percentage points to 36.3%; in contrast, the rates for men of the
same age increased by 16.2 percentage points to 28.2%. Since then, the gap between younger

30
T he number of workers working part-time for economic reasons increased from 4.4 million in February 2020 to 5.8
million in March 2021 on a seasonally adjusted basis. See https://www.bls.gov/web/empsit/cpseea07.htm.
31
See https://www.bls.gov/news.release/empsit.t15.htm for U-6 unemployment rates. U-6 is a measure of the total
unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic
reasons, as a percentage of the civilian labor force plus all persons marginally attached to the labor force. For more on
this measure, see CRS In Focus IF10443, Introduction to U.S. Economy: Unemployment, by Lida R. Weinstock.

Congressional Research Service 9
Unemployment Rates During the COVID-19 Pandemic

men and women has reversed. The unemployment rate for teenaged men (15.4%) was higher than
the rate for teenaged women (10.7%) in March 2021. Although unemployment rates for younger
workers remain relatively high compared to older workers, the March 2021 rates for men and
women across the remaining age groups have declined to similar levels. The rate for men ages
20-24 (10.9%) was slightly higher than the rate for women of the same age (9.5%). The large
disparities observed in April 2020 between younger men and women were not observed in older
age groups, although women ages 25-54 and 55 and over had rates 1-3 percentage points higher
than their male counterparts. This relatively modest gap has since closed; the rate in March 2021
for women ages 25 to 54 (5.5%) was the same as the rate for men (5.5%), and the rate for women
ages 55 and over (4.6%) was nearly the same as that of men ages 55 and over (4.5%).

Figure 6. Monthly Unemployment Rates by Sex and Age
Seasonally adjusted monthly data, January 2020 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: Every group experienced their peak unemployment rate in April 2020, except for 16 - to 19-year-old
men, who experienced their peak rate in May 2020.

Unemployment Rates by Racial Group and Hispanic Ethnicity
As seen in Figure 7, the unemployment rates for Black, Asian, and White32 workers increased
sharply in early 2020. But whereas the unemployment rate for White workers peaked in April
2020, the rate for Black and Asian workers continued to rise through May 2020. The March 2021
rates for Black (9.6%), Asian (6.0%), and White (5.4%) workers were all higher than their

32 Asian, Black, and White are the three racial categories used in BLS, T able A2: Employment status of the civilian

population by race, sex, and age. See https://www.bls.gov/news.release/empsit.t02.htm.

Congressional Research Service 10
Unemployment Rates During the COVID-19 Pandemic

respective rates in January 2020. The rate for Black workers has declined 7.1 percentage points
since peaking in May 2020, compared to a decline of 8.9 percentage points for Asian workers and
8.7 percentage points for White workers across the same period.

Figure 7. Unemployment Rates by Racial Group
Seasonally adjusted monthly data, January 2020 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: Black and Asian workers experienced their peak unemployment rate in May 2020. White workers peak
rate occurred in April 2020.

People of any race can identify as being either Hispanic or non-Hispanic in the CPS. As seen in
Figure 8, Hispanic workers, like Black and Asian workers, continue to experience elevated
unemployment rates. In March 2021, non-seasonally adjusted unemployment rates experienced
by Hispanic (8.2%) and non-Hispanic (5.7%) workers were higher than those experienced prior to
the recession. While unemployment remains elevated compared to January 2020, these rates are
much lower than the peak exhibited in April 2020. The unemployment rate for Hispanic workers
rapidly increased by 13.7 percentage points to 18.5% from February to April 2020. For non-
Hispanic workers the unemployment rate increased by 10 points to 13.6%.

Congressional Research Service 11
Unemployment Rates During the COVID-19 Pandemic

Figure 8. Monthly Unemployment Rates by Hispanic Origin
Non-seasonally adjusted monthly data, January 2020 to March 2021

Unemployment Rates by Education
In general, workers with lower levels of educational attainment have higher rates of
unemployment. This pattern has been amplified during the current recession, as seen in Figure 9.
The unemployment rate for workers with less than a high school diploma peaked in April 2020
(21.0%), which was higher than the peak for those at all other education levels. The March 2021
rate for workers with less than a high school diploma (8.2%) was also higher than the rate for all
other education levels. Workers with a Bachelor’s degree or higher, the highest educational level
classified here, had the lowest peak unemployment rate (8.4% in April 2020) and the lowest
March 2021 rate (3.7%) among all education levels.

Congressional Research Service 12
Unemployment Rates During the COVID-19 Pandemic

Figure 9. Monthly Unemployment Rates by Education
Seasonally adjusted data, January 2020 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: All groups experienced their peak unemployment rate in April 2020.

U.S. Labor Force Participation Rate: Historical
Trends
While the unemployment rate measures the prevalence of unemployment in the labor force, it
does not consider the state of the labor force itself. When persons stop looking for work, they exit
the labor force, decreasing the number of persons who are either working or actively looking for
work. Such persons are not counted in the unemployment rate, by definition, but are an important
group to examine when evaluating unemployment. CRS therefore uses the labor force
participation rate to further contextualize unemployment rates observed during the COVID-19
pandemic. The labor force participation rate measures the percentage of noninstitutionalized
people ages 16 and older who are either looking for work, or working. 33
Over much of the past two decades, the labor force participation rate has generally declined.
Following several years of modest growth through the early and mid-90s, labor force
participation rates started to plateau, hit a historical peak in April 2000 (67.3%), and then
declined. Labor force participation declined further following the Great Recession, before

33 For definitions of the labor force, labor force participation rate, unemployment rate, and other relevant terms, see

https://www.bls.gov/cps/definitions.htm#lfpr.

Congressional Research Service 13
Unemployment Rates During the COVID-19 Pandemic

stabilizing and steadily increasing starting in October 2015. This decline can be attributed to
several factors, although one prominent reason is the ongoing retirement of the baby boomer
generation. 34 Despite the increase exhibited following the Great Recession, the labor force
participation rate in January 2020 (63.4%) prior to both the COVID-19 pandemic and economic
recession remained below its historical peak.
Between February 2020 and April 2020, the labor force participation rate exhibited an
unprecedented decline of 3.1 percentage points as 8.3 million people left the labor force. The
participation rate partially recovered between May 2020 and August of 2020 before stagnating. It
remains below the pre-recession rate (63.4%) in March 2021 (61.5%).

Figure 10. Historical Labor Force Participation Rate
Seasonally adjusted monthly data for January 1948 to March 2021

COVID-19 Recession: Trends in Labor Force
Participation
The COVID-19 pandemic affected the labor force participation rates in every major demographic
group. The analysis in this section compares the pre-recession (January 2020) labor force
participation rate to the current labor force participation rate, calculating the difference between
the two for each month between January 2020 and March 2021. Figure 11 shows the sharp
decline in the labor force participation rate for individuals ages 16 years and older between
February 2020 and April 2020. During this period, 8.3 million individuals left the labor force. The
overall rate recovered between May 2020 and August 2020 before stagnating. The labor force
participation rate in March 2021 remains 1.9 percentage points below its pre-recession level.

34
See Michael Dotsey, Shigeru Fujita, and Leena Rudanko, Where is Everybody? The Shrinking Labor Force
Participation Rate, Federal Reserve Bank of Philadelphia, Economic Insights Vol 2. Issue 4, Philadelphia, PA, 2017,
pp. 17-24, https://www.philadelphiafed.org/-/media/frbp/assets/economy/articles/economic-insights/2017/q4/
eiq417.pdf.

Congressional Research Service 14
Unemployment Rates During the COVID-19 Pandemic

Figure 11. Labor Force Participation Rate During COVID-19 Pandemic
Seasonally adjusted monthly data from January 2020 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: LFPR: Labor Force Participation Rate; ppt: percentage points. Changes in LFPR since January 2020 have
not been tested for statistical significance.

Labor Force Participation Rate by Age and Sex
Figure 12 displays the change in the labor force participation rate since January 2020 by age and
sex. Between January 2020 and April 2020, every group experienced a decline in their labor force
participation rate. Women aged 16 to 19 (-7.0 percentage points) and men aged 20 to 24 (-9.2
percentage points) experienced the largest declines in labor force participation between January
2020 and April 2020. Men and women in the 25-54 and 55-and-older age groups experienced
smaller declines in labor force participation but have seen their recovery stagnate. All groups
except for men aged 16 to 19 remained below their January 2020 partic ipation rates in March
2021.

Congressional Research Service 15
Unemployment Rates During the COVID-19 Pandemic

Figure 12. Labor Force Participation Rate by Age and Sex
Seasonally adjusted monthly data for January 2020 to March 2021

Labor Force Participation Rate by Race and Ethnicity
Figure 13 displays the change in the labor force participation rate for the Black, Asian, and White
racial groups since January 2020. Between January 2020 and April 2020, each group experienced
a sharp decline in their labor force participation rate. In March 2021, the participation rate for
each group remained below its January 2020 value. In particular, participation rates for Black
individuals (-2 percentage points) and White individuals (-1.9 percentage points) remained well
below their January 2020 values in March 2021.

Congressional Research Service 16
Unemployment Rates During the COVID-19 Pandemic

Figure 13. Labor Force Participation Rate by Race
Seasonally adjusted monthly data from January 2020 to March 2021

Individuals of any race can identify as Hispanic or non-Hispanic. The data on labor force
participation rate for these two ethnic groups are not seasonally adjusted. Therefore, this report is
constrained to a comparison across values for January 2020 and the most recent month for which
the data are available. This comparison shows that Hispanic individuals had higher participation
rates in both January 2020 and March 2021 than non-Hispanic individuals, but the decline in
labor force participation over this period was greater for Hispanic persons. The labor force
participation rate for Non-Hispanic individuals in March 2021 was 1.5 percentage points below
its value for January 2020. For Hispanic individuals, the participation rate in March 2021 was 2.1
percentage points below its January 2020 value.

Figure 14. Labor Force Participation Rate by Hispanic Origin
Non-seasonally adjusted monthly data, January 2020 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.

Congressional Research Service 17
Unemployment Rates During the COVID-19 Pandemic

Notes: LFPR: Labor Force Participation Rate; ppt: percentage points. Statistical significance is not calculated for
these trends and it is unclear how dependent these trends are on regular seasonal variation. Changes in LFPR
since January 2020 have not been tested for statistical significance.

Labor Force Participation Rate by Educational Attainment
Figure 15 displays the difference in the labor force participation rate from its January 2020 level
for groups with different levels of educational attainment. Labor force participation fell for all
groups between January 2020 and April 2020. The largest decline was experienced by those with
a high school diploma (-4.3 percentage points). In March 2021, every group remained below their
labor force participation rate in January 2020. Specifically, those with a high school diploma (-3.8
percentage points) and a bachelor’s degree or higher (-1.8 percentage points) had participation
rates that remained close to those in April 2020.

Figure 15. Labor Force Participation Rate by Educational Attainment
Seasonally adjusted monthly data for January 2020 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: LFPR: Labor Force Participation Rate; ppt: percentage points. These data reflect the civilian population
that is 25 years and older. Changes in LFPR since January 2020 have not been tested for statistical significance.

COVID-19 Recession: Nonfarm Payrolls
The number of nonfarm workers on payroll further contextualizes the relatively high
unemployment rates observed during the COVID-19 pandemic. Unemployment rates and labor
force participation rates do not measure the extent of job disruption occurring during the
pandemic. By comparing the number of jobs before the recession to recent data, CRS can
evaluate the extent of job loss and put unemployment rates into a broader economic context.

Congressional Research Service 18
Unemployment Rates During the COVID-19 Pandemic

Figure 16 displays the gap between the January 2020 and March 2021 employment levels for all
supersector industries in the North American Industry Classification System (NAICS). 35 In March
2021, there were 8.1 million fewer jobs than there were in January 2020. The largest portions of
this gap were made up by the leisure and hospitality (3.0 million), education and health services
(1.1 million), and government (1.1 million) sectors. While losses were concentrated in a handful
of major sectors, employment gaps existed for all sectors in March 2021.

Figure 16. Change in Employment by Sector
Seasonally adjusted data for March 2021; relative to January 2020

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: A single purple box reflects 10,000 jobs. Data for March 2021 are preliminary. “Other services” is a BLS
aggregation of three subsectors: repair and maintenance, personal and laundry services, and membership
associations and organizations.

Trends in Employment in the Private Sector
Figure 17 displays the monthly change in seasonally adjusted nonfarm jobs from January 2020 to
March 2021 for six major sectors of the private sector. 36 Job loss peaked in April 2020 for all
sectors presented in the figure. The leisure and hospitality sector experienced a higher peak in job
losses (-8.3 million) than any other sector. Additionally, the leisure and hospitality sector had the
largest employment gap in March 2021 (-3.0 million) than any other sector in that month. The

35
Sectors are defined by the NAICS and can be found at https://www.bls.gov/iag/tgs/iag_index_naics.htm.
36 For the purpose of this visualization, CRS selected the six private sectors with the largest (i.e., most negative)

average losses in seasonally adjusted nonfarm jobs from January 2020 to March 2021.

Congressional Research Service 19
Unemployment Rates During the COVID-19 Pandemic

trade, transportation, and utilities sector had the second largest peak in job losses (-3.4 million),
followed by education and health services (-2.7 million), professional and business services (-2.3
million), other services 37 (-1.4 million), and manufacturing (-1.4 million). In March 2021, all six
of these sectors had fewer jobs compared to their respective employment levels in January 2020.

Figure 17. Job Loss During the COVID-19 Recession in the Private Sector
Seasonally adjusted monthly data for January 2020 to March 2021

Source: Created by CRS using data from the Bureau of Labor Statistics (BLS). Extracted using the Labor Force
Statistics data series on https://www.bls.gov/data/.
Notes: M: million. Data for February and March 2021 are preliminary. Changes in employment since January
2020 have not been tested for statistical significance.

Trends in Employment by Government Sector
Figure 18 displays the monthly change in seasonally adjusted nonfarm jobs from January 2020 to
March 2021 for three levels of government employment: federal, state, and local. While the
number of federal government jobs increased during 2020 (peaking at +309,000 jobs in
August), 38 state and local governments both experienced significant job losses. Local
governments experienced the largest job losses of any government level, peaking at 1.2 million
jobs lost in May. There were 949,000 fewer local government jobs in March 2021 than in January
2020. State government jobs fell throughout 2020 and peaked in October (-340,000 jobs). In

37 “Other services” is a BLS aggregation of three subsectors: repair and maintenance, personal and laundry services,

and membership associations and organizations. Sectors are defined by the North American Industry Classification
System (NAICS) and can be found at https://www.bls.gov/iag/tgs/iag_index_naics.htm.
38 T his peak could be due to temporary employment for those conducting activities related to the 2020 Decennial

Census.

Congressional Research Service 20
Unemployment Rates During the COVID-19 Pandemic

March 2021, state government employment was 188,000 jobs below its January 2020
employment level.

Figure 18. Job Loss During the COVID-19 Recession in the Public Sector
Seasonally adjusted monthly data for January 2020 to March 2021

Data Limitations and Caveats
National level data presented in this report are from the Current Population Survey (CPS) or
Current Employment Statistics (CES) survey and state level data are from the Local Area
Unemployment Statistics (LAUS) program. The CPS is a sample survey of about 60,000
households conducted by the Census Bureau for BLS. The CES is a sample survey of about
144,000 business and government agencies conducted by BLS. LAUS is a BLS program that
calculates state-level unemployment rates using multiple data sources, including the CPS and
CES. 39
Estimates from all three sources are subject to sampling and non-sampling error. 40 Sampling error
occurs when the survey sample is not representative of the underlying population, while non-
sampling error describes errors often associated with data collection. 41 Sampling error is a result
of statistical theory that underlies any estimate generated through surveys. While the CPS and
CES samples are selected to be representative of the nation, the possibility remains that it does
not accurately estimate certain nationwide statistics. 42 Non-sampling error refers to all sources of

39 In addition to the CPS, LAUS uses the Current Employment Statistics survey, state Unemployment Insurance claims

counts, the Quarterly Census of Employment and Wages program, and data from the Census Bureau’ s American
Community Survey and Population Estimates Program; https://www.bls.gov/lau/laumthd.htm.
40 For further discussion of error, see the “Reliability of the Estimates” section of the Employment Situation report’s

T echnical Note at https://www.bls.gov/news.release/empsit.tn.htm. For a description of LAUS estimation procedures,
see https://www.bls.gov/lau/laumthd.htm.
41 For more information, see https://www.bls.gov/opub/hom/topic/error-measurements.htm.

42 For more information, see https://www.bls.gov/opub/hom/topic/sampling.htm.

Congressional Research Service 21
Unemployment Rates During the COVID-19 Pandemic

error that are not due to sampling. They can result from incorrect or biased collection and
processing of the data. For example, non-sampling error can occur if a surveyor incorrectly
records responses or a respondent incorrectly responds to a question.

COVID 19 Pandemic-Related Data Issues
The COVID-19 pandemic increased non-sampling error in the CPS and CES due to a number of
factors. For example, BLS reported that both surveys experienced lower response rates.43 BLS
additionally noted that business closures initially interfered with the ability for businesses to
respond to CES inquiries. (The bureau has since made statements affirming the robustness of its
CPS and CES estimates despite these lower response rates.44 ) Furthermore, BLS detected an error
in its CPS categorization procedures that likely underestimated unemployment early in the
recession. 45 Specifically, large numbers of workers were classified as employed but not at work
when they should have been recorded as unemployed on temporary layoff.
Per agency policy, BLS did not adjust CPS records, but it did provide adjusted estimates of the
unemployment rate. This report does not use these adjusted estimates as they are not official BLS
estimates. BLS estimated that its categorization error underestimated seasonally adjusted
unemployment by roughly 0.9 percentage points in March 2020, 4.8 points in April, 3.1 in May,
1.2 in June, 0.9 in July, 0.7 in August, 0.4 in September, 0.3 in October, 0.4 in November, 0.6 in
December, and 0.6 in January 2021. In February 2021, the error underestimated seasonally
adjusted unemployment by an estimated 0.5 percentage points. These estimates evaluate what the
impact would be in the worst-case scenario, as the true impact is uncertain. BLS released a
statement regarding the underestimate, noting that, “these assumptions probably overstate the size
of the misclassification error.”46 In later months, BLS made efforts to correct this classification
error during data collection and processing. 47
Additionally, BLS recently identified a data processing error in the CES, which began in July
2020 but remained undetected. The error unintentionally caused some businesses to be
inappropriately included in the sample and used for estimates. BLS is resolving the issue and has
not yet released guidance on the impact of the issue on employment estimates. 48
LAUS was impacted by both the low response rate and the categorization error due to its
connection with the CPS and CES. Considering that LAUS is dependent on a number of other
data sources that were impacted by COVID-19 in their own right, the net effect of the pandemic
on LAUS estimates is unknown. 49

43 See the FAQ BLS produced on this topic for more on the impact o f COVID-19 on data collection by month at

https://www.bls.gov/covid19/home.htm.
44 See https://www.bls.gov/covid19/employment -situation-covid19-faq-april-2020.htm.

45 See CRS Insight IN11456, COVID-19: Measuring Unemployment, by Lida R. Weinstock.

46 See https://www.bls.gov/covid19/employment -situation-covid19-faq-january-2021.htm#ques3.

47 Among other protocols, the Census Bureau monitored survey responses in August and marked those they felt could

be misclassified. T hese responses were then re-evaluated. For more on BLS and Census efforts to reduce the
misclassification, see https://www.bls.gov/covid19/employment -situation-covid19-faq-august-2020.htm#ques9.
48
For the BLS notice on this error, see https://www.bls.gov/ces/notices/2021/ces-sample-rotation-issue-caused-by-
pandemic-related-challenges-to-enrollment.htm.
49 For more on the impacts of COVID-19 on LAUS and its inputs, see https://www.bls.gov/covid19/effects-of-covid-

19-pandemic-on-employment-and-unemployment-statistics.htm.

Congressional Research Service 22
Unemployment Rates During the COVID-19 Pandemic

General Data Caveats
Other data considerations include the following:
 Lack of seasonally adjusted data: Seasonally adjusted data are published by BLS
for selected labor force indicators to better account for seasonality in the trends. 50
Without seasonal adjustments, it is difficult to distinguish between trends related
to the recession and seasonal trends. Where adjusted data are not available, this
report presents unadjusted data that do not account for underlying seasonal
variation.
 Reference week: In general, CPS data are collected for the calendar week
containing the 12th of the month. CES data are collected for the pay period
including the 12th of the month. This could lead to incongruity between actual
labor force conditions over the course of a month and the conditions observed, as
well as inconsistencies between CES-reported data and CPS-reported data.
 CPS and LAUS unemployment rate comparability: While the LAUS program
uses the same unemployment concepts as the CPS and uses the CPS as an input,
LAUS estimates are based on multiple sources (including administrative data).
Consequently, CPS and LAUS estimates are not directly comparable.

Author Information

Gene Falk, Coordinator Isaac A. Nicchitta
Specialist in Social Policy Research Assistant

Paul D. Romero Emma C. Nyhof
Research Assistant Research Assistant

Jameson A. Carter
Research Assistant

Acknowledgments
The four Research Assistants in CRS’s Domestic Social Policy Division were responsible for the analysis
and writing of this report, under the guidance of Gene Falk, Specialist in Social Policy. Questions from
congressional staff should be directed to Mr. Falk.

50 See CPS and LAUS documentation for more on seasonal adjustment at https://www.bls.gov/cps/seasonal-

adjustment-methodology.htm and https://www.bls.gov/lau/lauseas.htm.

Congressional Research Service 23
Unemployment Rates During the COVID-19 Pandemic

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

Congressional Research Service R46554 · VERSION 10 · UPDATED 24

File and source

File: R46554.10.pdf
Size: 3,248,380 bytes
SHA-256: 57a59957078aeab964ed9402ff368e48cc97cffcb3f56de952407b221d6437ca
Our copy: R46554.10.pdf
Original: crsreports.congress.gov