Just a Quickie
I’ll have a lot more to say about the July jobs report next week, but I just wanted to get you some top-line conclusions for weekend reading.
In the first place, the household survey continues to be a mess, with very low response rates, and coding error by the Census Bureau interviewers. But if we add back the error and also the substantial number of people moving in and out of the workforce every month, it looks like the real rate is getting much closer to the reported rate.
The employer survey is doing much better, and response rates were back to normal in July. Almost 14% of nonfarm employees lost their jobs in March and April, but 42% of them got their jobs back in May through July.
So 8.8 million people getting their jobs back is great news, but there are still 12 million left. Breaking it down by industry, we see the keys are going to be retail and services, especially restaurants and bars.
A few things:
- All told, services were 85% of all job losses and 73% of remaining lost jobs.
- About 55% of lost manufacturing jobs have returned, now 5% of lost jobs.
- Restaurants and bars had 28% of all job losses through April and 18% of workers who are still out of work. That’s the single biggest pool of unemployed and still down 18% from February to July.
- If we combine high fixed-cost services that rely on density and volume to make up for it – leisure, hospitality, childcare and residential medical – these accounted for 46% of all job losses and 37% of those still out of work. These are going to be the most problematic areas until there is a vaccine. Still down 16%.
- Brick and mortar retail was 11% of all job losses, but only 5.4% of remaining lost jobs. This is because home categories – furniture, appliances, electronics, building/garden, grocery and health/personal care – have fared pretty well and are almost flat with February employment. The job losses are almost all concentrated in non-home categories, comprising 5.1% of the remaining unemployed.
- I find the slow recovery in professional and business services troubling. These are largely jobs that can be done from home, but still 10% of remaining lost jobs are in that category. These are likely permanent job losses if they aren’t back by now.
That’s it for now. More next week. Have a great weekend!
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.