While the NBER has declared that the recession ended in April 2020, and income, sales, and GDP have all fully recovered, two of the series that the NBER uses have yet to have made a full recovery: Industrial production, still down -1.2% compared with February 2020, and employment, still down -4.4% as of the jobs report last month.
So the main questions for this month’s jobs report for July are how much of that 4.4% has been made up, and do the leading indicators in the report continue to suggest more growth ahead?
Here’s my synopsis of the report:
- 943,000 jobs added. Of these, 703,000 were private sector jobs, and 240,000 were government jobs, 220,700 in local education alone. The alternate, and more volatile measure in the household report indicated a gain of 1,043,000 jobs, which factors into the unemployment and underemployment rates below.
- The total number of employed is still -5,702,000, or -3.7% below its pre-pandemic peak. At this rate jobs have grown this year, it will take another 10 months for employment to completely recover.
- U3 unemployment rate declined -0.5% to 5.4%, compared with the January 2020 low of 3.5%.
- U6 underemployment rate declined -0.6% to 9.2%, compared with the January 2020 low of 6.9%.
- Those on temporary layoff declined -572,000 to 1,239,000.
- Permanent job losers declined -257,000 to 2,930,000.
- May was revised upward by 31,000, while June was revised upward by 88,000, for a net gain of 119,000 jobs compared with previous reports.
Leading employment indicators of a slowdown or recession
These are leading sectors for the economy overall, and will help us gauge how strong the rebound from the pandemic will be. These were very positive:
- the average manufacturing workweek increased 0.2 hours to 40.5 hours. This is one of the 10 components of the LEI.
- Manufacturing jobs increased 27,000. Since the beginning of the pandemic, manufacturing has still lost -433,000 jobs, or -3.4% of the total.
- Construction jobs increased 11,000. Since the beginning of the pandemic, -227,000 construction jobs have been lost, or -3.0% of the total.
- Residential construction jobs, which are even more leading, rose by 8,300. Since the beginning of the pandemic, 42,700 jobs have been *gained* in this sector, or 5.1%.
- temporary jobs rose by 9,700. Since the beginning of the pandemic, there have still been 252,800 jobs lost, or -9.8% of all temporary jobs.
- the number of people unemployed for 5 weeks or less increased by 276,000 to 2,257,000, which is 175,000 higher than just before the pandemic hit.
- Professional and business employment increased by 60,000, which is still -556,000, or about -2.6%, below its pre-pandemic peak.
Wages of non-managerial workers
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $0.11 to $25.83, which is a 4.7% YoY gain. This is excellent news, considering that a huge number of low-wage workers have finally been recalled to work.
Aggregate hours and wages:
- the index of aggregate hours worked for non-managerial workers rose by 0.7%, which is a loss of -3.3% since just before the pandemic.
- the index of aggregate payrolls for non-managerial workers rose by 1.1%, which is a gain of 4.2% since just before the pandemic.
Other significant data:
- Leisure and hospitality jobs, which were the most hard-hit during the pandemic, increased 380,000, but is still -1,737,000, or -10.3% below their pre-pandemic peak.
- Within the leisure and hospitality sector, food and drink establishments gained 253,200, but is still -969,000, or -7.9% below their pre-pandemic peak.
- Full time jobs increased 1,265,000 in the household report.
- Part time jobs decreased -250,000 in the household report.
- The number of job holders who were part time for economic reasons declined by 144,000 to 4,483,000, which is an increase of 85,000 since before the pandemic began.
This was an excellent report on virtually every front. I really can’t find any negatives or particularly soft spots. Not just the totals, but the leading internals were all positive to very positive, including leading job sectors and wages. Full-time jobs increased strongly, and even the decline in part-time jobs was really a sign of strength.
The only *relatively* negative thing I can say about this report is, in response to the questions I asked at the top, that, even at this rate, it will take until the middle of next year to fully recover to where we were just before the pandemic. In particular, the leisure and hospitality sector, which was particularly hard-hit by the pandemic, still has a long way to go.
In short, more like this, please.