Don’t be fooled by today’s employment numbers for June: a look at tangible and intangible jobs

While the employment numbers for June from BLS may look good on the surface, a closer look reveals a dangerous trend. A large part of the employment rebound in June was in jobs where there is physical presence with customers. Increases occurred tangible services of accommodation & food services and personal services, and in the one intangible service that requires physical presence arts and entertainment. These three sectors accounted for almost half of the jobs gained in June, benefiting no doubt from a loosening of lockdown restriction. However, the June numbers reflect the situation in the middle of June. Since then coronavirus cases have skyrocketed. These industries may face a rapid decline in employment as new restrictions are imposed.

Overall, as well as the case with the May rebound (see my earlier analysis), tangible jobs fared better than intangible jobs in June, accounting for three-quarters of the employment gains. Trade, transportation & utilities jobs saw a big gain and manufacturing jobs continued to increase.

One encouraging sign is that intangible services jobs in professional & business services and in educational & health services increased at a healthy level. These are nowhere near their February levels but the trend is on the right direction. As I noted before, we will have to wait an see whether the experience of the crash will alter the supply relationship with companies and consumers finding they can get by with a lesser degree of intangible services.

 

June 2020 parts