March Job Market Updates: Shaker’s Take
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September Job Growth Led by Leisure/Hospitality, Retail, Health Care/Social Assistance, Professional/Business Services
Following larger gains in the prior 4 months, total nonfarm employment as measured by the Bureau of Labor Statistics rose by a modest 661,000 in September, below its February 2020 level by 7% or 10.7 million.
Significant job gains in September were seen in leisure and hospitality, retail trade, health care/social assistance and in professional/business services.
Employment was down for government positions, primarily in state and local government education at local schools and state colleges. With many schools opting for some or all online learning policies, there had been a decrease in September of jobs for bus drivers, cafeteria workers and teacher aides, many which will see potential new employment as schools determine it is safe to reopen to more in-person classes.
Overall the U.S. has recovered about 11.4 million jobs since the recovery began in May after losing about 23 million jobs at the peak of the pandemic crisis.
Breaking down September job growth by specific categories, jobs in leisure and hospitality grew by 318,000 during the month, with 200,000 jobs, almost 66% of the gain, occurring at food services/drinking places. Over the last 5 months employment at food services/drinking places has grown by 3.8 million, down by 2.3 million since February. Amusements, gambling, and recreation grew by 69,000 and the accommodation category was up by 51,000 in September.
Retail trade added 142,000 jobs with clothing and clothing accessories stores up by 40,000, about 25% of the over-the-month change in retail, with other large increases general merchandise stores by 20,000, motor vehicle and parts dealers up by 16,000, and health and personal care stores up by 16,000. Employment in retail trade is 483,000 lower than in February.
Jobs in health care and social assistance was up by 108,000 but down by 1.0 million since February. Health care added 53,000 jobs of which 18,000 jobs were in offices of physicians, 16,000 for home health care services, and 14,000 in offices of other health practitioners. Social assistance added 55,000 jobs, of which 32,000 were for individual and family services and 18,000 in child day care services.
Professional and business services added 89,000 jobs with 22,000 of those jobs in building and dwelling services, 13,000 for architectural and engineering services, and 12,000 for computer systems design and related services. Professional/business services have gained 910,000 jobs since April, but employment in the category is still lower by 1.4 million from February.
Jobs in transportation and warehousing was up by 74,000 with 32,000 new jobs in warehousing and storage, 21,000 for transit and ground passenger transportation, and 10,000 for couriers and messengers. The category has added 291,000 jobs since May, but jobs for transportation and warehousing is down by 304,000 from February.
Manufacturing added 66,000 jobs with about 66% of the gain attributed to durable goods led by 14,000 jobs for motor vehicles and parts and another 14,000 for machinery. Jobs in manufacturing are down by 647,000 from February.
Financial activities added 37,000 jobs with 20,000 jobs in real estate/rental and leasing and 16,000 jobs in finance and insurance. Financial jobs are down by 162,000 from February.
Other services industry added 36,000 jobs, with 31,000 of those jobs in membership associations and organizations. Jobs for other services is down by 495,000 from February.
Jobs in information was up by 27,000 with motion pictures/sound recording accounting for 23,000 of those jobs. The information category is down by 276,000 since February.
Construction jobs were up by 26,000 with 16,000 new jobs for residential specialty trade contractors and 12,000 jobs for construction of buildings. Construction employment is down by 394,000 from February.
Wholesale trade saw an increase of about 19,000 jobs, with gains of 13,000 for durable goods and 8,000 for nondurable goods. Jobs in wholesale trade are down by 312,000 from February.
Government jobs were down by 216,000. Employment in local government education was down by 231,000 and state government education was down by 49,000. A loss of 34,000 jobs for the federal government was due to the number of temporary Census 2020 workers losing their jobs. Jobs in local government, other than education, was up by 96,000.
Jobs in private education was down by 69,000. Jobs in this category are down by 355,000 since February.
There was a small increase of 1,000 jobs in mining. Jobs in this industry are down by 133,000 since a recent peak in January 2019; about 75% of the decrease in jobs has happened since February of this year.
The change in total nonfarm payroll employment for July was revised upward by 27,000, from +1,734,000 to +1,761,000, and the revision for August was up by 118,000, from +1,371,000 to +1,489,000. With these revisions, job growth for July and August combined was 145,000 more than previously reported.
In September, the unemployment rate decreased by 0.5 percentage point to 7.9%. The number of unemployed persons decreased by 1.0 million to 12.6 million. Both measures have declined over the past 5 consecutive months but are higher by 4.4 percentage points and 6.8 million people than in February.
Among the unemployed, the number of persons on temporary layoff was down by 1.5 million in September to 4.6 million; down significantly from the high of 18.1 million in April but still 3.8 million higher than in February. In September, the number of permanent job losers was up by 345,000 to 3.8 million; up by 2.5 million since February. The number of unemployed “job leavers”, those who quit or voluntarily left their previous job and immediately began to look for a new job, rose by 212,000 to 801,000 in September.
In September, the number of unemployed persons who were jobless less than 5 weeks was up by 271,000 to 2.6 million. The number of persons jobless 5 to 14 weeks was down by 402,000 to 2.7 million, and the number of persons jobless 15 to 26 weeks decreased by 1.6 million to 4.9 million. The number of long-term unemployed (those jobless for 27 weeks or more) was up by 781,000 to 2.4 million.
The labor force participation rate was down by 0.3 percentage point to 61.4% in September and is 2.0 percentage points lower than in February. The employment-population ratio of 56.6% was about the same as August but is 4.5 percentage points lower than in February.
In September, the number of persons employed part-time for economic reasons (involuntary part-time workers) was down by 1.3 million to 6.3 million, due partially to a decrease in the number of persons whose hours were cut due to diminished work demand or business conditions. The number of involuntary part-time workers is 2.0 million higher than in February. These individuals, who would have preferred full-time employment, were working part-time because their hours had been reduced or they were unable to find full-time jobs.
The number of persons not in the labor force who currently want a job stands at 7.2 million, changed little in September; 2.3 million higher than in February. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.
Among those not in the labor force who currently do want a new job, identified as people who are marginally attached to the labor force, stands at 1.9 million, little changed since August. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers who believe that no jobs were available for them was 581,000 in September; little changed from August.
In September, 22.7% of employed persons in the last four weeks teleworked or worked at home because of the coronavirus pandemic, down from 24.3% in August.
In September, 19.4 million persons reported that they did not work at all or worked fewer hours at some point in the last 4 weeks because their employer closed or lost business due to the pandemic. This measure is down from 24.2 million in August. Among those who reported in September that they were unable to work because of pandemic-related closures or lost business, 10.3% received at least some pay from their employer for the hours not worked.
About 4.5 million persons not in the labor force in September were prevented from looking for work due to the pandemic. This is down from 5.2 million in August. To be counted as unemployed individuals must either be actively looking for work or on temporary layoff. As this supplemental data come from questions added to the BLS household survey beginning in May to help gauge the effects of the pandemic on the labor market, the data is not seasonally adjusted.
Take a look at the infographic below for more info on the September job market.
As employers evaluate means for remaining productive with sufficient workplace capacity, new skills are being required by companies with the foresight to identify new means for remaining relevant and competitive. Identifying current employees suitable for adjusted career paths and retraining are being prioritized by many companies as an advantage for retaining current employees and maximizing their productivity. Additionally, astute companies are actively attracting and sourcing new candidates with either the required expertise or the ability to be retrained.
At the same time, highly qualified candidates are seeking companies with stability and values — attributes demonstrated in a well-defined and clearly tangible employer brand.
For consultation on initiatives for recruitment, retention, onboarding, referral programs, internal communications, internal mobility, training programs and employer branding, consult with a Shaker Client Services team. Contact us at info@shaker.com