Given the devastating effects that the COVID-19 pandemic has had on job growth, understanding labor market trends has taken on increasing importance. The U.S. Bureau of Labor Statistics’ Business Employment Dynamics (BED) data is a great resource for national and state-level private sector employment growth, and includes job gains caused by businesses opening or expanding and job losses driven by businesses closing or contracting. Quarterly private-sector job trends data is available by industry and by firm size. The data lags by a few quarters, with the most recent data available being the second quarter of 2020.
What is the data telling us?
- From April to June of 2020, on net, the U.S. private sector lost about 14.6 million jobs, or a 12.2% net loss in total private jobs, with 20.4 million in total job losses and 5.7 million in gross job gains. The majority of job gains and losses were realized through employment growth and contraction at existing firms rather than through business openings and closings.
- Nationally, private firms of all sizes saw employment fall, especially among establishments with a thousand employees or more. However, small businesses were significantly impacted as well: firms with less than 50 employees made up about 30.7% of the net loss in employment in the second quarter of last year.
- Unsurprisingly, the leisure and hospitality industry shed the most jobs by far, with a net loss of about 5.5 million jobs, or 41%. Retail trade, professional and business services, and education and health services were also among the most impacted sectors.
Why is this important?
It is important to track employment and unemployment to understand the economic wellbeing of the nation. The United States is heavily reliant on domestic consumption, with approximately 70% of goods produced being purchased by US residents. An increase in unemployment leads to a decline in purchasing power which has a ripple effects throughout the economy.
Examining employment trends by industry sector can help us understand how the United States is anticipated to recovery from the COVID-19 pandemic. The data above shows a sharp decline in leisure and hospitality jobs. According to Brookings, this industry can expect to experience a relatively quick recovery, whereas retail trade, particularly clothing and footwear, is anticipated to recover more slowly. Other sectors such as construction and financial services are expected to experience no negative long term impact.
 Bureau of Labor Statistics. "Consumer Spending and U.S. Employment From the 2007–2009 Recession Through 2022” https://www.bls.gov/opub/mlr/2014/article/consumer-spending-and-us-emplo...
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