On Friday, the Bureau of Labor Statistics reported that the U.S. economy added 1.8 million jobs in July. Not a bad number, on an absolute scale. 1.8 million jobs is a lot of jobs. And the total did beat economists’ expectations by about 300,000 jobs.
But…
The total was way, way down from the 4.8 million jobs added in June. Nobody really expected July to match June’s huge surge but the decrease still roused fears that momentum in the labor market and the U.S. economy was slowing. Not a good sign for believers in a V-shaped recovery for a coronavirus-battered U.S. economy.
The picture gets more worrying as you dig deeper. The report showed a 241,000 jump in local-government employment, but that is probably a misleading artifact left over from previous data on seasonal adjustments in teaching jobs–this year, of course, schools are closed and local governments are laying off workers so it’s hard to see how this increase could be an accurate reflection of hiring in the sector. And more workers were unemployed for longer. Out of the 16.3 million unemployed Americans in July, almost 8 million had been out of work for 15 weeks or longer. That’s up from 4.7 million from June.
The most worrying trend in the report, however, was where the July hiring came from. Remember that the numbers in this report come from a survey that ended on July 12, so it reflects a relatively more positive front end of the month rather than the last half when states began to re-impose restrictions on their economies.
In the July survey the leisure and hospitality sector showed the addition of 592,000 net jobs. That was about one-third of the net jobs added for the economy as a whole. With states again shutting bars or imposing lower limits on in-door dining, it’s hard to see this number as anything more than a temporary blip.
Same in the retail sector. In what looks like a bounce related to the timing of the survey, the sector added 258,000 jobs in the July survey.
That’s 850,000 jobs–or 47% of the job gains in the July report–from two sectors that are liking to show much slower growth-or to go into retreat–in the August job report. (The reporting on that survey will close this week.)
