July employment data

This morning’s employment data shows both strengths and vulnerabilities.

BLS reported that employment in July rose by 1.8 million, in line with expectations of an increase of 1.7 million jobs. [Reminder that these are not all “new” jobs but workers being called back to work.]. Employment in both tangible and intangible producing industries rose. Similar to June (but at a smaller scale), the biggest increases were in industries where there is physical presence with customers. Increases occurred tangible services of personal services and, to a lesser degree in accommodation & food services, and in the one intangible service that requires physical presence: arts and entertainment. As I noted last month, these industries are also the ones most vulnerable to a re-closure of the economy.

Almost all other industries saw more modest gains. However, information services and telecommunications employment declined. Employment in nursing and residential care facilities continued to drop dramatically.

Bottom line: under normal circumstances, this would be a stellar increase. However, in the age of COVID-19, this is only a modest rebound in employment. Much more needs to be done.

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