U.S. Jobs: Strong Signs, But Still a Long Road to Recovery
With 1.4 million jobs added and unemployment dipping from 10.2 percent at the end of July to 8.4 at the end of August, you would think there would be a certain amount of jubilation in the wake of such numbers. You would be wrong.
To recap, we're still coming down from a peak of 14.7 percent unemployment in April, and according to NPR we're still woefully short of regaining the 20.1 million jobs lost in the month of April alone. When we add up all the gain from May (2.7 million), June (4.8 million), July (1.7 million), and August (1.4 million) we get a total of 10.6 million jobs gained.
This leaves an outstanding shortfall of 9.5 million jobs remaining to be filled just to reach parity. But the economy also lost 1.4 million jobs in March, so that bumps the shortfall to 10.9 million jobs still in need of filling. However, as NPR reported in its story on today's numbers, that doesn't represent the total number of Americans who are currently out of work.
Thanks to furloughs and other support programs that pay workers who aren't actually working, there are still more jobs that are not being filled. NPR reports that "as of -mid-August, more than 29 million people were collecting some form of unemployment benefits."
I recall hearing that, at the peak of the downturn, somewhere between 36 and 40 million Americans were out of work. No matter how you slice things then, we still have a long slog ahead to get back to where we were in February.
Where Did Job Growth Happen in August?
With so much lost ground to make up for, most employment sectors that the U.S. Bureau of Labor Statistics tracks showed growth for August. That said, all sectors remain below their February 2020 levels, some quite substantially. Here are those details:
The economic sectors that were gainers in August, surprisingly, start with Government. This comes in part through an uptick of 238,000 temporary workers hired for the 2020 Census. Outside that big bump, federal government rose by +13,000 and local government by +95,000, for a net total of +344,000 for the sector in August. That said, overall government employment is still 831,000 jobs below the February level.
Retail trade added 249,000 jobs in August, as people return more to in-person shopping. 116,000 of those jobs were in general merchandise stores, with various other kinds of outlets (motor vehicle and parts dealers, +22,000; electronics and appliance stores, +31,000; and miscellaneous retailers, +17,000) making up much of the remaining gain. Here again, this sector remains down by 655,000 jobs vis-�-vis February.
Professional and business services grew by 197,000 jobs in August, with temporary help services making up 107,000 of that increase. Other contributors included: architecture and engineering services: +14,000; business support services: +13,000; computer systems design and related services: +13,000. This sector is still down by 1.5 million jobs since February.
Leisure and hospitality increased by 174,000 jobs in August, with the vast majority of those jobs (134,000) in food services and drinking establishments. Even though this sector is up by 3.6 million jobs for May through August, it is still down by 2.5 million jobs when compared to February levels.
Education and health services got a 147,000 jobs bump in August, but remains down by 1.5 million jobs against February numbers. Health care increased by 75,000 in August, with job losses (-14,000) in nursing and residential care offsetting gains in physicians' offices (+27,000), dental practices (+22,000), hospitals (+14,000) and home health care services (+12,000). Private education jobs increased by 57,000 for August as well.
Transportation and warehousing ramped up by 78,000 jobs in August as follows: warehousing and storage, +34,000; transit and ground passenger transport, +29,000; truck transport, +10,000. This sector remains down by 381,000 jobs since February, though.
Other services industries gained 74,000 jobs for August, including: membership associations and organizations, +31K; repair and maintenance organizations, +29,000; personal and laundry services, +14,000. Overall employment in this sector is down by 531,000 jobs from its February level.
Financial activities went up by 36,000 jobs in August, with real estate, rentals and leasing leading the pack at +23,000. Overall, this sector is down by 191,000 jobs as compared to February's numbers.
Manufacturing added 29,000 jobs, with most gains in the nondurable goods component: +27,000. Overall, this sector remains down by 720,000 jobs since February.
Wholesale trade is up by 14,000 jobs for August, with 9,000 jobs also under the nondurable goods heading. Overall, this sector remains down by 328,000 jobs since February.
There are only three sectors reported as "changed little" for August: mining, construction, and our own home sector, information.
Where to From Here?
What I found most interesting about this latest report and other numbers — mostly about those regarding the number of Americans currently accepting some form of financial support while out of work — is the difference between the official numbers of unemployed and the concomitant unemployment rate and those other numbers.
On the one hand, the U.S. BLS tells us there are 10.9 million unemployed Americans and an 8.4 percent unemployment rate. On the other hand, outlets like NPR and the U.S. Department of Labor report that between 25 and 30 million Americans are participating in some kind of unemployment program right now, and receiving unemployment benefits. Though we have no place to go but up from where we currently stand, employment-wise, there's some question about how big a hole we have to climb out of to get back to where we were.
The distance between the downward plunge in March and April, and the upward climb from May through August and on into 2021 is widening. If we've got a V-shaped recovery underway, it's going to be a wide one. With four months since the drop-off, we've gained back about half the official employment rate since then.
That would seem to indicate that it will be at least another four months before coming back to parity would be possible. But I don't think we're going to see another month like May (+2.7 million jobs) or June (+4.8 million jobs) in the upcoming mix. That would seem to indicate 6-8 months is the best possible scenario.
But alas, that doesn't seem to include the other 15-to-20 million Americans now on unemployment assistance who seemingly aren't being included in the overall counts. We do have to find them jobs, too. That means a return to parity is probably out there, past 2022 or later.
It took eight years to make up for the job losses of the 2008-2009 recession. Who knows how long this recovery will really take? Here's hoping the slope of recovery gets steeper. Otherwise, it's going to be a longer haul than most people want to contemplate.