Employment Blog August 2020

By Stephen Singer, August 27, 2020

This Employment Blog is from the U S Department of Labor, Bureau of Labor Statistics. Nonfarm payroll employment increased by 1.8 million in July, and the unemployment rate declined by 0.9 percentage point to 10.2 percent. These improvements reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it. In July, employment rose in several major industries, with the largest gains in leisure and hospitality, government, retail trade, professional and business services, other services, and health care.The rate of recovery in the labor market slowed in July, as job growth over the month was less than half that for June. As of July, total nonfarm employment is 12.9 million, or 8.4 percent, lower than in February, before the pandemic crisis unfolded in many parts of the United States. Similarly, although unemployment continued to fall in July, the unemployment rate and the number of unemployed people are up by 6.7 percentage points and 10.6 million, respectively, since February.

Taking a closer look at the July payroll data, employment in leisure and hospitality increased by 592,000, accounting for about one-third of the over-the-month growth in total nonfarm employment. Within the industry, food services and drinking places added 502,000 jobs over the month, following gains of 1.5 million each in May and June. Despite gains over the past 3 months, employment in food services and drinking places is 2.6 million lower than in February. Elsewhere in leisure and hospitality, employment in amusements, gambling, and recreation increased by 100,000 in July.

Employment in government rose by 301,000 in July but is 1.1 million lower than its February level. Typically, public-sector education employment declines in July before seasonal adjustment. This year, however, employment declines occurred earlier than usual due to the pandemic, resulting in unusually large July employment increases in local government education (+215,000) and state government education (+30,000) after seasonal adjustment. Federal government employment increased by 27,000 over the month, reflecting the hiring of temporary workers for the 2020 Census. The U.S. Postal Service lost jobs over the month (-5,000).

In July, retail trade employment increased by 258,000, following increases of 827,000 in June and 386,000 in May. Despite these gains, employment in retail trade remains 913,000 below its February level. Employment rose in most retail industries in July, although almost half of the gain occurred in clothing and accessories stores (+121,000). By contrast, employment declined in the component of general merchandise stores that includes warehouse clubs and supercenters (-64,000) and in food and beverage stores (-19,000).

In July, professional and business services added 170,000 jobs, with most of the gain occurring in temporary help services (+144,000). By contrast, there were job losses in management of companies and enterprises (-12,000). Since February, employment in professional and business services is down by 1.6 million. Employment in the other services industry increased by 149,000 in July, with personal and laundry services accounting for most of the gain (+119,000). Employment in other services is 627,000 lower than in February.

In July, health care added 126,000 jobs, with increases in offices of dentists (+45,000), hospitals (+27,000), and offices of physicians (+26,000). Elsewhere in health care, job losses continued over the month in nursing and residential care facilities (-28,000). Employment in health care is down by 797,000 since February.

Employment in social assistance increased by 66,000 in July, with gains in child day care services (+45,000) and in emergency and other relief services (+6,000). Employment in social assistance is 460,000 lower than in February.

Transportation and warehousing added 38,000 jobs in July, following an increase of 87,000 in June. Although job growth has occurred over the past 2 months, transportation and warehousing has lost 470,000 jobs since a recent employment peak in January. In July, job gains occurred in transit and ground passenger transportation (+20,000), air transportation (+16,000), and couriers and messengers (+9,000).

In July, manufacturing employment increased by 26,000, after increases of 357,000 in June and 240,000 in May. Despite recent job gains, employment is down by 740,000 since February. In July, an employment gain in motor vehicles and parts (+39,000) was partially offset by losses in fabricated metals (-11,000), machinery (-7,000), and computer and electronic products (-6,000).

Employment in financial activities rose by 21,000 in July, with most of the gain occurring in real estate and rental and leasing (+15,000). Financial activities employment is 216,000 lower than its February level.

In July, construction employment changed little (+20,000) but is 444,000 lower than in February.

Mining continued to lose jobs in July (-7,000). The industry has shed 127,000 jobs since a recent peak in January 2019, although nearly three-fourths of the decline has occurred since February 2020.

Real average hourly earnings for all employees decreased 0.4 percent from June to July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.2 percent in average hourly earnings being more than offset by an increase of 0.6 percent in the Consumer Price Index for All Urban Consumers (CPI-U).Real average weekly earnings decreased 0.6 percent over the month due to the change in real average hourly earnings combined with a 0.3-percent decrease in the average workweek.