August employment grows – but slower and differently for intangibles and tangibles

Breaking the pattern of the past few months, August’s employment data slows the clear effects of the COVID-19 Delta virus with a much smaller than expected increase of 235,000. As I have noted in an earlier posting, the labor market had been settling back into the pre-pandemic pattern of relatively equal growth in tangible-producing versus intangible-producing industries. August changed that.

In August, employment in intangible-producing industries rose much faster than in tangible-producing industries – admittedly at slower rate of 189,000 in intangible-producing industries versus 46,000 in tangible-producing industries. This compares to increases of around half a million in both tangible-producing and intangible-producing industries in the past few months.

The most dramatic shift was in Accommodation and Food Services which went from strong growth over the past few months to actually declining in August. But the slowdown in employment growth was generally across the board (see chart below). Only Professional and Business Services saw a real increase in employment growth in August.

I doubt the August data signals a return to the pre-2010 situation of rapid growth in employment in intangible-producing industries versus in tangible-producing (see earlier posting). But it does constitute a break in the parallel trajectories of the intangible-producing and the tangible-producing industries.

For more on the categories, see my explanation of the methodology in an earlier posting

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