Last Friday, the Bureau of Labor Statistics reported that the American economy created 1,763,000 jobs in June. Judged by the equity markets, the gains were welcomed. The American economy has now been creating jobs for three straight months (May, June, and July) following two months of pure horror (March and April).
Overall, total employment in the U.S. stands at about 139.6 million. In February 2020 – the last month before the effects of the shutdown showed up in the figures – employment stood at 152.5 million. This leaves almost 13 million jobs to go before the American economy is back to pre-coronavirus levels. When will we get there?
The Industry Look
With this backdrop, the obvious question is when will the economy reach its previous levels. Looking at the industry detail may provide some insight.
The following figure is the percentage change in employment by broad sectors. Clearly, the two sector that are labeled – Leisure and Hospitality and Retail Trade – were the hardest hit. When Leisure and Hospitality was at its worst in April 2020, employment was down almost 50%. Luckily, some of those jobs have come back.
The picture was also bleak for Retail Trade, with employment down more than 15% in April 2020. The picture has brightest to down just 6% through July 2020.
Before looking, can you guess which industries are the other colors?
Industry Look on Percentages
In the table below is the percentage change in employment over 2020, sorted by best performing to worst performing sectors. Fascinatingly, Financial activities is on top, with employment losses of “just” over 2%.
The next best performing sector has been Government at -4.7%. Other members of the top 5 best performing industries (i.e. industries that have not completely collapsed) have been Natural Resources at -5.5%, Retail Trade at -5.8%, and Manufacturing at -5.9%.
On the other end, the weakest sectors for employment strength have been Leisure and Hospitality at -25%, Information at -11%, Professional Business Services at 7%, Education and Health Services at -6%, and Trade, Transportation, and Utilities at -6%.
Industry Look on Absolutes
The next table has the change in employment on an absolute basis. Interestingly, Financial Activities have experienced the lowest drop in employment on both an absolute and percentage change basis. Employment in the sector was down just 185,000 through July 2020.
Other sectors with low job losses include Information at -319,000, Natural Resources at -454,000, Manufacturing at -754,000, and Retail Trade at -914,000.
The weakest sectors for job losses include Leisure and Hospitality at -4.3 million, Trade, Transportation, and Utilities at -1.7 million, Professional Business Services at -1.6 million, Education and Health Services at -1.5 million, and Government at -1.1 million.
Summing Up
Overall, the American economy is trending up, albeit at a pace that needs to pick up sooner rather than later if the American economy is going to recover all those lost jobs before the end of 2020.
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