Most people, myself included, have been very focused on the weekly initial unemployment filings. In each of the first 20 weeks after the beginning of the lockdown of the economy due to the pandemic there were over a million people filing for unemployment. This is unprecedented to say the least and the sheer volume of these filings will keep this story in the headlines for the next several months.
The deeper story, and the one that is more important to those that are directly affected by these job losses are in the types of business that these job losses are in — because that is what will dictate if and when these people will return to work. The chart below illustrates all of the business sectors reported by the BLS (Bureau of Labor Statistics) every month, illustrating the job losses for each sector of the economy.
This chart illustrates two things. The blue bars represent the total job losses, mostly in March and April of 2020, and the orange bars represent, as of July 2020, the NET job losses for each sector. Below are several points that need to be pointed out:
- The sector with the most extensive initial loss of jobs in the Leisure & Hospitality sector where 25% of jobs were lost. [This is on a base of 16.3 million jobs as of February 2020.]
- The sector with the smallest initial loss of jobs is the Professional and Business Services sector, which lost 4.2% of employment. [This is on a base of 21.2 million jobs as of February 2020.]
- Three sectors have had continued job losses since the peak of the lockdown. The Mining & Oil Extraction, Transportation, and Information sectors have all continued to lose jobs since April.
- The sectors that have to date had the best recovery of jobs are the Construction and the Durable Goods sectors.
The Leisure and Hospitality sector is still the most hard-hit sector of the economy. The sector had an initial loss of 25% of jobs. Roughly speaking, this represents over 4 million of the 16 million jobs lost across the United States in March and April of this year. As different pieces of the economy began to open up from May to July, 1.4 million of these jobs have returned. The sector has a net loss of 16.3% of the jobs that people held as of the end of February 2020.
As mentioned above, three sectors have had continued job losses after April 2020. The Mining and Oil/Gas Extraction sector initially had a relatively small loss of 4.4% of their 700,000 jobs, which is a total of 31,000 jobs. In the three months since those losses have grown by another 33,000 jobs and now represents an employment loss of 9.1%. The Transportation and Utility sector had an initial loss of 11.9% of jobs (a total of 733,000 jobs), this loss is now up to 13.2%. This sector is currently the second-highest loss in employment in the economy. The Information sector is the third sector with continued losses. The initial decline of 7.3% of jobs (211,000 jobs) has grown to a total of 8.4% of employment.
The Construction sector has recovered over two-thirds of the jobs lost due to the lockdown. In March and April, a million of the 7.3 million jobs (13.8%) were lost. Since April, 661,000 of those jobs have returned. Currently, the net jobs lost to the pandemic is 4.7% The Durable Goods sector employed 8 million people at the end of February. In the first two months of the pandemic, 13.2% of these jobs have been lost. Nearly 59% of these lost jobs have now returned, for a net loss of 5.4%.
The source of the data used in this article is the Employment Situation report by the BLS, which is released every month. This coming weekend we will be updating all of the data in our Employment Data Center. Along with this update, we will be putting together a state-by-state assessment of the economic recovery risk associated with these lockdowns.