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Sunday, May 10, 2020

Employment: April Diffusion Indexes Decline to Record Lows

by Calculated Risk on 5/10/2020 11:34:00 AM

The BLS diffusion index for total private employment was at a record low 4.8 in April, down from 28.5 in March.

For manufacturing, the diffusion index was at a record low 2.6, down from 26.3 in March.

Think of this as a measure of how widespread job gains or losses are across industries. The further from 50 (above or below), the more widespread the job losses or gains reported by the BLS.  From the BLS:

Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment.
Employment Diffusion IndexClick on graph for larger image.

Both indexes generally trended down in 2019 indicating job growth was becoming less widespread across industries (especially manufacturing).

Then both indexes declined sharply in March 2020, and collapsed to new record lows in April, due to the impact from COVID-19.