OCTOBER JOB MARKET UPDATES: SHAKER’S TAKE
Hospitality, Government, Retail, Business Services and Health Care Lead Job Growth in July
Even though many parts of the U.S. saw increases in coronavirus cases in late June and early July (the reporting period for the July BLS jobs report is actually June 13 – July 12) along with newly imposed restrictions on some businesses, the economy was able to grow by 1.763 million payrolls in July of which 1.46 million were in the private sector. Though slower than the last two months, this was the third month in a row for job growth after June’s increase of 4.8 million and May’s 2.7 million.
The services sector, after deep cuts due to shelter in place orders and business closures in March, led non-farm payroll gains in July. The leisure and hospitality industry added back 592,000 jobs after gaining nearly 2 million in June, and retail trade jobs increased by 258,000 in July after a rise of more than 800,000 during the prior month.
Of the 592,000 new jobs in leisure/hospitality, 502,000 of those jobs were at food services and drinking places which follows gains of 2.9 million in May and June combined. Despite the gains over the last 3 months, employment in food services and drinking places is down by 2.6 million since February. Hospitality increased by 90,000 jobs in July.
Related to the hospitality category, employment also rose in amusements, gambling, and recreation by 100,000.
Employment in retail is now 913,000 lower than in February. In July, nearly half of the job gain in retail occurred with 121,000 jobs in clothing and clothing accessories stores. At the same time, general merchandise stores including warehouse clubs and supercenters lost 64,000 jobs.
Retailers and restaurants were impacted the most from the decrease in employment with a loss of 8 million jobs combined. In the last three months about half of those jobs have been brought back, but that still leaves the job count in leisure/hospitality down 4.3 million from where it was in February. And the momentum for hiring in these two sectors has slowed down for the moment, with restaurants, bars, hotels, and entertainment venues seeing a decrease of 75% in July activity compared to June and retailers down 67.75% for the same period.
Job growth in professional and business services increased by 170,000 but remains 1.6 million below its February level. The majority of July’s gain was for temporary help services with an increase of 144,000.
Other services added 149,000 jobs, with the 119,000 of those jobs being for personal and laundry services. Since February, jobs for other services has decreased by 627,000.
Healthcare added 126,000 jobs, with 45,000 hires for dentist offices, 27,000 in hospitals, 26,000 in physician offices, and 16,000 for home health care services. Job losses continued in nursing and residential care facilities down by 28,000. Employment in health care is down by 797,000 since February.
Social assistance jobs increased by 66,000, with 45,000 jobs for child daycare services. Social assistance jobs are down by 460,000 since February.
Transportation/warehousing was up by 38,000, following an increase of 87,000 in the previous month. Though this sector has seen growth over the past 2 months, jobs in transportation/warehousing are still down by 470,000 since the most recent peak in January. In July, employment rose in transit and ground passenger transportation was up by 20,000, air transportation by 16,000, and couriers and messengers by 9,000.
Manufacturing was up by 26,000 in July. There was a gain of 39,000 jobs in motor vehicles and parts but a loss of 11,000 jobs in fabricated metal products, a decrease of 7,000 in machinery and computer, and a loss of 6,000 jobs in electronic products. Though manufacturing is up by 623,000 jobs over the past 3 months, employment in the sector is still less by 740,000 from February.
Financial activities increased its job count by 21,000 in July, with 15,000 hires in real estate and rental and leasing. Since February, there are 216,000 fewer jobs in the category.
Construction employment was up slightly by 20,000, following job growth of 619,000 in May and June combined. Nevertheless, job count in the sector is 444,000 less than what it was in February.
Government jobs rose by 301,000 in July, after an increase of 54,000 in June.
Mining/Logging continued to lose jobs with a loss of 7,000 impacted by a decrease of 11,000 jobs in support activities for mining. Mining has lost 127,000 jobs since its most recent peak more than a year-and-a-half ago in January 2019. Nearly 75% of this decrease in mining jobs has occurred since February 2020.
Information-related industries were down by 15,000 jobs in July.
The change in total non-farm payrolls for June was revised down slightly by 9,000 to 4.791 million, while May’s payrolls were revised up by 26,000 to 2.725 million for a total revision for the two months upward by 17,000.
Over the past three months, the U.S. has recovered about 42% of the 22 million jobs lost due to the pandemic with gains of 4.8 million in June and 2.7 million in May, therefore though still down 12.9 million jobs since March, 9.3 million people have either been newly hired or rehired back to their old jobs.
Per research from Manpower, new job postings are up in three specific categories: 1) Jobs that are transforming business – example: software developers; 2) jobs that are moving things – example: delivery drivers; 3) jobs that are helping people – example: physicians.
The unemployment rate was down in July from 11.1% to 10.2%; a level still slightly exceeds the highest rate of 10% during the 2008-2009 recession.
Per the BLS report, 16.3 million people were unemployed in July — nearly three times the 5.9 million who were out of work before the pandemic. The total unemployment level is at 16.3 million Americans from a peak of 23.1 million in April.
The number of unemployed individuals on temporary layoffs in July fell by 1.3 million to 9.2 million, about half of April’s level. However, the number of permanent job losers remained steady in July compared to June at 2.9 million.
A broader measure of unemployment known as the “U6” rate indicates the “real” rate was 16.5% in July, falling from 18% in June. The U6 rate includes workers who can only find part-time jobs and those who have become too discouraged to look for jobs due to so few jobs being available.
Take a look at the infographic below for more info on the July job market.
During this unstable, nerve-racking period of time, employers who convey as much of an open-door policy as possible to employees and candidates will gain appreciation, loyalty, and optimized retention in the future.
People are reaching out to each other for guidance and reassurance. With millions of people either unemployed, underemployed, or apprehensive about the stability of their current employer, employers should be making every possible effort to maintain a consistent line of communication with current employees, prospective candidates for future hiring as well as company alumni.
To maintain required workforce capacity at this time and to be able to rescale expediently and efficiently in the future, stay in touch with your current and potential workforce and do not compromise on the means available to your company for interacting with individuals during the periods of recruitment, hiring and onboarding as well as during their tenure as an employee. From personal correspondence to finely targeted mass-distribution options, maintaining a steady line of interaction is first and foremost humane at a time like this but also competitively advantageous.
Shaker Recruitment Marketing can help implement and maintain a broad range of employee and candidate communications for your company. Please let us know if you would like to speak to one of our Account Executives about short-term campaigns or long-term projects for which we can provide consultation and project management.
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