U.S. Jobs: Recovery Still On, Still Slow in September
Consider the following list of job losses and gains, from March through September this year, courtesy of the Oct. 2 Employment Situation Summary (and preceding such reports) from the U.S. Bureau of Labor Statistics:
What this shows is a loss of 21,501,000 jobs in March and April of this year, and gains of 11,436,000 in the five months since then. Thus, the jobs market has clawed back just over half (a little more than 53 percent) in 5 months what it lost in two catastrophic months as the pandemic struck with great force.
The problem, of course is the shape of the subsequent series of numbers since April. After a rising trend for May and June, there's been a fall-off ever since. And the current trend — though it's hard to estimate the slope of a curve with only three data points — clearly shows declining job growth since the spike in June at nearly 5 million jobs added.
The most disheartening thing about this overview is that it's hard not to see a growth decline that's getting worse, instead of getting better. Even if job growth were to continue at the same rate shown in September indefinitely, it would take just over 15 months to restore the employment situation to pre-pandemic parity.
And somehow, I have a strong feeling that a steady rate of over 660,000 jobs added monthly just isn't in the cards right now. This week, the airlines, theme parks, and other businesses have announced sizable impending layoffs owing to declines in demand for their offerings. Things are tough, and appear inclined to get tougher, in the months to come.
U.S. jobs lost and added from March through September 2020 (Source: U.S. Bureau of Labor Statistics)
What Does the September Report Tell Us, In More Detail?
Job gains in September came primarily in the sensitive and fragile sectors of leisure and hospitality and in retail trade. They also come from the more stable, less volatile sectors of health care and social assistance and professional and business services.
These gains were offset by a dip in government employment, primarily in state and local government education. Here's a little more detail on how things broke out in those particular areas of employment:
Leisure and hospitality increased by 318,000 for September, with 200,000 of that total in food services and drinking places. Even though this sector has added 3.8 million jobs back since May, total employment still remains down 2.3 million compared to February levels.
Retail trade added 142,000 jobs across the entire sector. This includes clothing and clothing accessories gaining 40,000 jobs, general merchandise adding 20,000 jobs, motor vehicle and auto parts bringing in 16,000 jobs, and health and personal care stores piling on another 16,000 jobs. Despite those gains, total employment in retail trade remains down by 483,000 compared to February levels.
Health care and social assistance employment grew by 108,000 for September, with 53,000 jobs added in health care (of which 18,000 came in physician's offices, 16,000 came in home health care services, and 14,000 came in offices of other health practitioners). Social assistance garnered 55,000 jobs (of which 32,000 came in individual and family services, and 18,000 came in child day care). Employment in this sector is down by 1 million jobs compared to February 2020.
Professional and business services increased by 89,000 jobs for September. This breaks down as follows: 22,000 jobs for services to buildings and dwellings, 13,000 jobs in architectural and engineering services, 12,000 jobs in computer systems design and related services. This sector has added 910,000 jobs since April, but remains 1.4 million jobs down from February levels.
Transportation and warehousing grew by 74,000 jobs in September, with 32,000 jobs in warehousing and storage, 21,000 jobs in transit and ground passenger transportation, and 10,000 jobs for couriers and messengers. This sector has added 291,000 jobs since May, but is 304,000 jobs below February levels.
Manufacturing jobs increased by 66,000 jobs in September. Of that total, durable goods provided approximately two-thirds of that gain (40,000 jobs or thereabouts), with 14,000 jobs added in motor vehicles and parts, and another 14,000 jobs added for machinery. Despite growth in the May to September period, sector employment is down by 647,000 vis-�-vis February levels.
Financial activities jobs grew by 37,000 jobs in September, of which 20,000 jobs were in real estate, rentals and leasing; and another 16,000 jobs in finance and insurance. Compared to February levels for the sector, employment remains down by 162,000 jobs.
Other services added 36,000 jobs for September, mostly on account of 31,000 jobs at membership associations and organizations. Compared to February levels for this sector, employment is down by 495,000 jobs.
Information (our home sector) added 27,000 jobs for September, but remains down by 276,000 compared to February levels. Of September's growth, the majority (23,000) of those jobs were motion picture and sound recording industry jobs.
Construction added 26,000 jobs for September, and remains down by 394,000 jobs versus February levels. Of September's growth, 16,000 jobs were in residential specialty trade contractors, and 12,000 jobs came in construction of buildings.
Wholesale trade added 19,000 jobs for September, and remains depressed by 312,000 jobs compared to February levels. Of September's gains, 13,000 jobs were in durable goods components, with another 8,000 in non-durable goods components.
Government employment was the only big loser for September with a decline of 216,000 jobs. Most of that came from the local government education (-231,000 jobs) and state government education (-49,000 jobs), offset by other increases of 96,000 jobs in local government jobs (not including education).
Private education employment also dropped by 69,000 jobs in September, wiping out a nearly identical gain for August. As compared to February levels, this sector is down by 355,000 jobs.
What we see here is a widespread but thin recovery in most of the sectors that the U.S. Bureau of Labor Services tracks, with a dip in education jobs, both private and public, as schools and school systems figure out how to cope with mostly online education delivery as the pandemic continues.
This Month's Net-Net: Waiting for the Other Shoe to Drop
What we seem to have here is a recovery that's slowing down and becoming increasingly thin and uncertain. Given that the big item in today's news as I write this article is news that President Trump and the First Lady have tested positive for coronavirus, the uncertainty part looks ready to ramp up right away.
With the election now just 32 days away, big changes are both possible and likely in the fairly near term. But the economy is like an aircraft carrier in that it can turn neither swiftly nor terribly accurately. What remains to be seen, is which way it's turning and how much growth we can expect in the months ahead.
Stay tuned, and I'll keep trying to read those tea leaves as upcoming reports continue to arrive monthly, no matter what else may happen.