Americans Getting Back to Work in July, Contrary to Popular Perceptions

Stay up to date on timely topics and market events. Subscribe to our Blog now.

Payroll jobs rose by 1.763 million in July, with private-sector jobs up 1.462 million. The “core” jobs measure we usually track, private sector less construction and retailing, gained 1.184 million jobs. June job counts were revised up for total jobs and down for private sector, but these changes were slight relative to the monthly changes.

Before making editorial comment, we’ll stipulate that the July gains are far lower than 4-to-5 million gains of June (how could they not be?) and July employment levels remain well below the pre-shutdown levels of February. Still, the announced July gains are far stronger than one would have expected given media accounts of a faltering/reversing economic recovery, and the data clearly show workers gradually getting back on the job.

It is hard work putting data together from all sectors of the economy. When private-sector and media analysts attempt to front-run the official news, they can easily be swayed by anecdotes and, occasionally, by political and epidemiological biases. Hence, we were skeptical of various claims that the economic recovery was relapsing in July in the face of a rebound in COVID cases. Those caseloads have since started to head down again, and, meanwhile, today’s data failed to show any meaningful setbacks in the pace of economic recovery.

There were a few pockets of especially strong gains, namely restaurants up 502,000, retail trade up 258,000, public schools up 215,000, temporary help services up 144,000, health care up 126,000, apparel stores up 121,000, personal services (barbers, etc.) up 119,000, recreation up 87,000, and childcare up 45,000. The public school gains are a false flag, as teachers who normally would have been “furloughed” in July this year went off the payrolls in May. The other large gains here are more substantial. Elsewhere, gains were more modest, with a few sectors showing slight declines, as there almost always are.

To put things in perspective, the accompanying table shows how various sectors have performed: those we normally focus on (construction, manufacturing, etc.), those showing especially sharp July gains and those sectors we have been describing in recent months as having been especially hard hit by the shutdown.

Exhibit 1: Some Details of Payroll Job Changes

Bureau of Labor Statistics. As of 31 Jul 2020. Select the image to expand the view.