Pandemic Job Losses: When Should We Begin A See A Real Improvement Back Towards “Full Employment”?

The housing boom brought about by super-low mortgage rates has enabled jobs in that sector to grow, while both construction as a whole and manufacturing are both down by roughly 4%, with losses of roughly 300,000 and 450,000 from the pre-pandemic peak, respectively.

Turning to the services sector, retail trade has not been that badly hit, off 350,000 jobs or -2.3%. Temporary help, another very leading indicator for employment (employers generally hire temps first before extending full-time offers), is off -6%, but this is a lower number at 175,000 jobs. The big decline is in professional and business services as a whole, off 770,000 jobs or -3.6%:

The educational sector has been a much bigger loser, off 1.3 million jobs in total, a decline of -5.3%. Local education is down -8.4%, for a loss of 700,000 jobs, and state education off -12.6%, or 350,000 jobs:

Finally, leisure and hospitality has been the hardest hit part of the economy, with a loss of about 3.5 million jobs, or over 20% of the entire employment in that sector. The food and drinking component is down -16.3%, or just over 2 million:

Putting the data together, we see that the lion’s share of the continuing losses in employment are:

- leisure and hospitality, including food and drinking -3.5 million

- education, -1.3 million

- professional and business services, -770,000

- manufacturing, -450,000

- retail trade, -350,000

- construction, -300,000

Leisure and hospitality, being an indoor activity focused on adults, and the food and drink components requiring being unmasked is probably going to be the last sector to recover. 

Since children are mainly a concern for spreading the disease to adults, once older adults are largely immunized, the worry fades. In other words, it seems very likely that normal, or close to normal, instruction will be able to begin in September.

The remaining big areas of losses should all start to improve in tandem with the percentage of the adult population that is immunized, so I would expect to see good improvement throughout the spring and summer. In other words, we might see substantially better jobs reports than we have seen in the past few months going forward from now through summer, and another jump with the beginning of the next school year. It would not be a surprise, though, to see a continuing slump in leisure and hospitality right through the end of the year, or until there is herd immunity (which means a large share of GOP ignoramuses getting vaccinated)

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Disclaimer: This blog contains opinions and observations. It is not professional advice in any way, shape or form and should not be construed that way. In other words, buyer beware.

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