The latest jobs numbers will be released by the Bureau of Labor Statistics this Friday. What should we expect and what will the report mean for job seekers, employers and investors? Here’s a quick take from Glassdoor Senior Economist Daniel Zhao:
Friday’s August jobs report could feel like Groundhog’s Day: a report similar to the solid but slower job gains seen in July’s report, while still leaving the job market in a deep economic hole to climb out of. August’s jobs report will be a critical indicator of whether the recovery can return to faster growth or whether it has more permanently slowed.
The economy is undergoing a great unwinding as it tries to recover from the abrupt effects of the coronavirus crisis. The historically large monthly payroll gains since May have been driven by the enormous amount of temporarily laid off workers being rehired. Although that gives the recovery a certain momentum, the rehiring of furloughed workers is a sugar high. The topline job gains don’t indicate net-new job creation. Eventually, the labor market will crash into a wall of permanent layoffs that will be harder to overcome. The question is how far from a full recovery will that hurdle appear?
Here are a few additional things I’ll be watching for in Friday’s report:
- An increase in permanent layoffs. The accumulation in permanent layoffs stalled in July, which was a hopeful sign. While permanent job losses are likely to resume, a slower rate of increase would give more confidence that the long-term economic damage of the crisis can be mitigated.
- Similarly, while rehiring of temporarily laid off workers is encouraging, it’s the low-hanging economic fruit in the recovery. Faster rehiring doesn’t necessarily translate to lasting job growth, but it would mean a faster return to pre-crisis levels and less risk that temporary layoffs turn permanent if the recovery stumbles.
- Signs of impact from the $600/week expanded unemployment benefits expiration. Despite the withdrawal of significant financial support for tens of millions of Americans, we haven’t seen strong evidence of the expiration’s effects yet. Payroll growth in lower-wage industries like retail or leisure & hospitality or job search activity could show evidence of these effects.
- Temporary Census workers are expected to add 288,000 to payrolls. While a significant boost to payrolls, these jobs are only temporary and should largely fade by October. Private payrolls in the August and September jobs reports will be more informative to understand the trajectory of the recovery.
To speak with Daniel Zhao about this Friday’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.
