NOVEMBER JOB MARKET UPDATES: SHAKER’S TAKE
4.8 Million New Jobs. Some Newly Created. Others Restored Rehires. Some Tentative Due to Rollbacks
Another very challenging jobs report to use as a barometer for future activity, but let’s look at these numbers as an indicator of employment activity before June 12, when the reporting cycle ended and before adjustments in opening up the economy began to be made later in the month as COVID-19 cases began to spike in Florida, Texas, Oklahoma, Arizona, California, and other states. Therefore, suspension of activity or rollbacks announced in various areas in the last two weeks are not reflected in these reports.
For trying to stay up with the constant adjustments to the employment marketplace, more timely data to review are the new claims for state unemployment benefits which came in at 1.427 million; the fourth week in a row in which about 1.5 million workers have filed new jobless claims, six times more than before the COVID-19 crisis. Continuing claims increased by 59,000 to 19.3 million. But the report from the Bureau of Labor Statistics (BLS) is what we need to look at to see which industries have been generating the most job activity.
The BLS jobs report for June indicated there were 4.8 million nonfarm jobs added either as new hires or through rehiring in June. The number of adults working part-time hours remained above normal at 9.1 million in June, more than double the February level, though less by 1.6 million from May to June as a substantial number of workers found full-time work.
In June, leisure and hospitality employment increased by 2.1 million, about two-fifths of the gain in total nonfarm employment. Over the month, employment in food services and bars rose by 1.5 million, following a similar gain in May. Despite these gains, employment in food services and drinking places is down by 3.1 million since February.
Employment in retail was up by 740,000, nearly double the gain in May, but 1.3 million lower than in February. Retail job gains were at clothing/clothing accessories stores, up by 201,600, general merchandise stores up 108,000, furniture and home furnishings stores up 84,000, and motor vehicle/parts dealers up 84,000. The amusement, gambling, and recreation industries were up by 353,000.
Leisure/hospitality/amusement/gambling/recreation and retail may be impacted by states reclosing during the June 13 – July 12 period (the next BLS jobs report period for the July report to be released on August 7). Some states halting or reversing their reopening plans will impact indoor restaurants, bars, indoor family entertainment venues (bowling alleys, gyms, arcades, etc.), schools, and other businesses with high social contact.
Education and health services in June were up by 568,000, 1.8 million below February’s level. Health care was up 358,000 in June, with gains in offices of dentists (+190,000), offices of physicians (+80,000), and offices of other health practitioners (+48,000). Otherwise in health care, job losses continued at nursing care facilities (-18,000).
Employment increased in the social assistance industry (+117,000), with gains in child daycare services (+80,000) and in individual and family services (+28,000) and private education (+93,000).
Job growth was also seen in the services industry in June (+357,000), with about three-fourths of the increase occurring in personal and laundry services (+264,000). Since February, employment for miscellaneous services is down 752,000.
Manufacturing was up 356,000 in June but is down by 757,000 since February. Increases were seen in the durable goods component, with motor vehicles and parts (+196,000) accounting for over half of the job gain in manufacturing. Employment also was up for miscellaneous durable goods manufacturing (+26,000) and machinery (+18,000). Within the non-durable goods component, plastics and rubber products with 22,000 new jobs saw the biggest increase.
Professional and business services were up by 306,000 jobs in June, but employment is 1.8 million below the February level. In June, employment rose in temporary help services (+149,000), buildings and dwellings (+53,000), and accounting and bookkeeping services (+18,000).
Construction was up by 158,000 jobs in June, following an uptick of 453,000 in May. These gains accounted for more than half of the decline in March and April (-1.1 million combined). Growth in June was seen for specialty trade contractors (+135,000), with growth about 50/50 between the residential and non-residential sectors. Job gains were also seen for construction of buildings (+32,000).
Transportation and warehousing were up 99,000 jobs in June, following declines in the prior 2 months (-588,000 in April and May combined). In June, jobs grew in warehousing and storage (+61,000), couriers and messengers (+21,000), truck transportation (+8,000), and support activities for transportation (+7,000).
Wholesale trade employment was up 68,000 in June but is down by 317,000 since February. In June there were job gains in durable goods (+39,000) and nondurable goods (+27,000).
Financial activities added 32,000 jobs in June, with over half of the gain in real estate (+18,000). Since February, employment in financial activities is down by 237,000.
Though state government jobs were down by 25,000, government jobs in general for June were up by 33,000 due to gains in local government education positions which were up by 70,000. Government employment is 1.5 million below February.
Computer systems design and related services were down by 20,000. Mining was down by 10,000 with most of the decline occurring in support activities for mining (-7,000). Mining employment is down by 123,000 since a recent peak in January 2019, although nearly three-fourths of the decline has occurred since February 2020.
The unemployment rate fell to 11.1% down from 13.3% in May and 14.7% in April, but still higher than in any previously recorded month since reporting began in 1948. There were almost 15 million fewer jobs in June than in February before COVID-19 required businesses to either go remote, slow down, or close. More than 40 million workers have filed for unemployment benefits since the beginning of the COVID-19 crisis, more than seven times the total number for all of 2019. But the unemployment rate was reported to be understated due to counting errors at the BLS. Workers who still have jobs but have not been working are being counted as “employed”, even though they are supposed to be considered “unemployed” under BLS rules.
The “U-6” rate, which counts underemployed workers and those who would like a job but are not actively looking was at 18% in June, down from 21.2% in May and 22.8% in April. The current “U-6” rate remains higher than the peak of 17.2% which occurred in 2009 during the “Great Recession”.
Another crucial factor for the decline of the jobless rate was the decrease of people on temporary layoff. That total fell by 4.8 million in June to 10.6 million after a decrease of 2.7 million in May. However, those reporting permanent job losses also jumped, rising by 588,000 to 2.883 million, the highest level in more than six years.
One other report to look at quickly is the Institute for Supply Management Manufacturing Index, which rose to 52.6 last month after registering 43.1 in May and 41.5 in April. New orders, production, hiring, and new export orders all jumped in June, after declining in May but at a slower pace than in April.
Of the 18 manufacturing sectors, 13 were up in June. Among the six biggest industry sectors, food, beverage, and tobacco grew at an accelerated level, while computer and electronics and chemical returned to stable growth and transportation equipment and fabricated metal products saw decreased activity.
Take a look at the infographic below for more info on the June job market.
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