Working Thoughts

I started doing the monthly Job Report again because this is unique. A pandemic of this magnitude is new to us. But that doesn’t mean we can’t learn from it.

The first thing to learn is during a pandemic, the classification of jobs gets weird. This may or may not have influenced the numbers.

The second thing to learn is WOW. These numbers blew away expectations. Economists were using the weekly unemployment figures to forecast a loss of potentially 8 million jobs. But the report said 2.5 million jobs gained. A swing like this is historic. Everything about it is.

Here are the job market and compensation numbers for May, 2020 (based on the job report):

Net gain of 2,500,000 jobs in the month

• Analysts expected an overall drop of 7,250,000
• Private sector payrolls increased by 3,094,000
• Private service producing industries gained 2,425,000
• Goods producing industries grew by 669,000

• April was revised to a loss 20,700,000 from an original reading of 20,500,000 loss jobs.
• March was revised to a loss of 1,400,000 jobs from a revision of 870,000 from an original reading of 710,000
• Payroll processor ADP reported an employment loss of 2,760,000 jobs

• 1,200,000 people are considered long term unemployed (jobless for more than 6 months). It was 939,000 in April and 1.2 million people in March 2020
• Employers announced plans to cut 397,016 jobs. It was a record in April, 671,129.

Unemployment rate dropped to 13.3%. It was 14.7% in April and 4.4% in March, 2020. There are some oddities with the reporting and the rate could be adjusted in the coming reporting cycles.

• The labor participation rate is 60.8%, up from 60.2%. It was 62.7% in March, 2020
• The employment to population ratio is 52.8%. It was 51.3% in April. It was 60.0% in March, 2020
• The U-6 report, which is a broader group to count (workers who are part time but want to be full time and discouraged worker), moved down to 21.2% from 22.8% in April. It was 8.7% in March.
• PMI, a measure of manufacturing pace, is 43.1%, up from 41.5%. It was 49.1% in March, 2020. Anything above 50% means the machines are running
• Service sector activity increased to 37.5%. It was an all time low of 26.7% in April.

Specific Segment Job numbers:

• Manufacturing increased by 225,000. It was down 1,300,000 in April.
• Construction gained 464,000 jobs. It was a loss of 975,000 jobs April.
• Retailers improved by 367,000 jobs. It was a loss of 2,100,000 jobs in April.
• Leisure and Hospitality Services gained 1,239,000 jobs. It had lost 7,700,000 jobs or 47% of the industry in April.
• Government sector declined by 585,000. This follows a loss of 980,000 in April.
• Education and Health Services gained 424,000. It had dropped by 2,500,000 jobs in April.
  • Health Care and Social Assistance gained 390,708 jobs. It loss 2,086,900 in April.
    • Health Care grew by 312,400 after gaining 14,000 in April
• Professional and Business Services increased by 127,000. It was down by 2,165,000 in April.
  • A gain of 39,100 jobs in Temporary Help. It was a loss of 841,900 jobs in April.

Wage (can be revised):

• The average weekly paycheck (seasonally adjusted) is $1,032.33.
• The average hourly earnings (seasonally adjusted) is $29.75. Down from $30.01 in April and up from $28.62 in March, 2020
• Average weekly hours and overtime of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted is 34.7.

Bureau of Labor Statistics