The latest jobs numbers are out from the U.S. Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor Senior Economist Daniel Zhao:
The economic recovery lost steam in July, slowing sharply from previous months. The report exposes cracks in efforts to reopen as employers struggle to deal with resurgent outbreaks around the country. The slowdown in the rate of recovery amid a worsening pandemic shows that a sustainable return to economic normal is hinged on first addressing the public health crisis.
Payroll employment increased by 1.8 million in July, slowing from a 4.8 million gain in June, according to today’s report from the Bureau of Labor Statistics. The increase in payrolls is historically large, but still down 12.9 million jobs from before the initial onset of the pandemic. Total employment remains at 2014 levels, and the unemployment rate, falling to 10.2 percent, is still at its highest point since 1982 and higher than peak unemployment during the Great Recession.
The number of workers on temporary layoff declined by 1.3 million while the number of permanent job losers were unchanged, falling only 6,000, a key reminder that the impressive job growth overall is still largely driven by rehiring of furloughed workers and masking elevated levels of permanent damage.
The recovery continues to be primarily driven by continued rehiring in the hardest-hit industries including leisure and hospitality (+592,000 jobs added) and retail (+258,000). Government employment rose by 301,000, but that was largely driven by seasonal effects—on a non-seasonally adjusted basis, government employment actually fell by 860,000.
Today’s jobs report comes at a critical juncture. Not only is it the first jobs report to capture the impact of the resurgent pandemic on American workers, it also coincides with Congressional negotiations on financial relief for many millions of Americans. And with less than three months until the election, attention on the coming jobs reports will likely heighten. Today’s report increases the pressure on policymakers to extend financial relief to avoid the slowdown from turning into a full-blown double-dip recession.
1.8 million jobs added is a positive sign that the recovery is progressing cautiously, but the economy is still down 12.9 million jobs relative to pre-crisis level. There’s still a long way to go.
Similarly, the unemployment rate was at 3.5 percent just a few months ago. The unemployment rate in July was just barely above the highest point in the Great Recession, but even beating that benchmark is hardly cause for celebration.
One encouraging sign is that permanent layoffs were essentially unchanged. They are still more than double pre-crisis levels, but a one-month reprieve from accumulating more permanent economic damage is a positive.
Most industries improved in July. Notably, information, which includes tech and media, reached new lows. The industries with the largest shortfalls compared to February are leisure and hospitality (-4.34 million), professional and business services (-1.65 million), education and health services (-1.61 million) and government (-1.12 million).
Seasonal adjustment is especially difficult during a crisis, and nowhere is that more clear than in government where the seasonal adjustment is masking continuing job losses as end-of-school-year layoffs were pulled forward.
To speak with Daniel Zhao about today’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.