The Latest On Jobs Is More Than A Little Encouraging

June’s jobs report looked very good indeed. Of course, not everything in the report is upbeat and there remains room for skepticism on figures that seem to have had an optimistic leaning since the pandemic began. Certainly the economy and the employment situation are still far less robust than they were last February before the anti-virus measures went into place. And a relapse into lockdowns and quarantines now, still a preferred option in some parts of the media and medical establishment, would obviously throw people out of work and reverse this good news quickly. For the moment, however, the picture is of an economy and a jobs market that is coming back nicely with the re-opening.

If anything, the figures presented for June are so good they naturally raise skepticism in light of other, less encouraging economic indicators such as the still elevated weekly initial claims for unemployment insurance. But if there is cause for caution in accepting this encouraging news at face value, there is equally good reason not to dismiss it. According to the Labor Department’s preliminary estimate, payrolls nationally increased almost 5 million in June, a remarkable 3.6% jump. Offering support for this picture of job creation, a separate Labor Department survey of households settled on a similar sized employment gain in June. Numbers of unemployed, according to this second survey, fell 2.5 million or by an unheard of 12.5%. The rate of unemployment fell from 13.3% of the workforce in May to 11.1% in June, a considerable improvement but still far from the 3.5% recorded last February before the anti-virus lockdowns and quarantines went into effect.

Also encouraging, payroll gains registered across just about all industry categories and sub-categories.  Out of nearly 200 business groupings used by the Labor Department, you could count the areas suffering cutbacks on the fingers of two hands. Most of these were hardly surprising.  These included air and rail transportation and travel.  Nursing home and residential care facilities also suffered minor cutbacks, as did community care. State government recorded employment declines and so did local government, except for teachers and school administrators, where hiring rose. A small part of technology saw declining employment – computer systems design. Since that is a work-from-home endeavor, this drop could be an anomaly in the data. These surveys become less and less reliable the narrower they focus on a small group.

Other than these very few areas, the employment growth was just where those looking for recovery would want it. Manufacturing saw a payroll gain of 356,000, a 3% rise. The large category of education and healthcare reported a payroll increase of 568,000 in June, a 2.6% increase of its May workforce. Retail saw a gain of 740,000, a jump of 5.4%, while leisure and hospitality, hard his by the quarantines and lockdowns, saw a payroll gain of over 2 million for a whopping 21% increase in employment.

To brighten the picture still further, employment gains also spread across every major demographic. All gained, but women outpaced men. White women saw the biggest rise, a 4.7% jump in jobs accompanied by and almost 20% drop in the numbers of unemployed. African American women had almost as upbeat a report.  It indicated a 3.1% jump in jobs and a 15% drop in numbers unemployed. Asians men and women together saw a 2.8% gain in jobs and a 6.7% decline in their numbers of unemployed. White and African American men saw improvement, but not as dramatic as the women showed. White men gained 2.8% more jobs in June and saw a 15.6% drop in the numbers counted as unemployed. African American men enjoyed a 1.1% rise in employment, which would count as strong in normal circumstances. Strangely, the Labor Department reported a 7.5% rise in unemployment among African American men.  Especially since this number runs counter to hiring directions, it raises suspicions. It could reflect the backlog in unemployment claims that developed in April and May and that have made an appearance in the June figures.  

There is material for doubt. There always is. Those with a political need to paint the economy in less bright colors will seek it. Otherwise, this latest jobs report offers reason for encouragement.  Of course if the latest infection spike in the South and West brings on renewed lockdowns in those regions or slows the opening elsewhere, the economy would suffer a setback.  The July jobs report then, when it comes out on August 7, would then look a lot less encouraging.