Employment/Rehiring Continues Its Rocky Road to Recovery

Employment/Rehiring Continues Its Rocky Road to Recovery

After huge employment losses in early 2020, the Twelfth District continued to add back jobs through October. The jobs recovery, however, varied significantly between different states and sectors. Furthermore, rapidly increasing COVID-19 infections and subsequent restrictions threaten the employment recovery in several district markets. We looked at the Bureau of Labor Statistics and Opportunity Insights latest data to get a better picture of what that means for our district. Here’s what we found.

Nonfarm job growth and unemployment

  • October nonfarm payrolls remained 7% below year-earlier levels, but the annual pace of losses continued to ease since reaching a low of -13% in April.
  • The Districtwide unemployment rate improved to 8% in October, from 16% in April.
  • The pace of recovery varied by sector. State and local governments, which account for about 14% of District payrolls, reported job losses in October led by an 8.3% year-over-year decline in local government jobs.
  • By October, Utah and Idaho recovered nearly all jobs lost during the initial phase of the pandemic while Hawai’i, Nevada, and California still have large employment gaps.

Figure 1. Nonfarm Job Growth & Unemployment

Nonfarm job growth and unemployment in the 12th District states and in the U.S. overall

Seasonally adjusted; subject to annual benchmark revision. Source: Bureau of Labor Statistics via Haver Analytics.

COVID-19 hits lower-income workers disproportionately

The employment recovery was also uneven across income levels. In all District states except Hawai’i, job losses have been more severe among low-income than high-income workers. Concurrently, household stress remained elevated. According to the Census Bureau’s Household Pulse Survey, roughly 8% of all U.S. households said they felt some level of housing insecurity in mid-November, indicting they either owed back-rent or mortgage payments. Respondents in Hawai’i and Nevada reported higher levels of housing insecurity than other states.

Figure 2. Job Losses & Gains by Income Level

Seven-day moving average as of September 30, 2020, percentage difference from January 4–January 31, 2020 baseline

Job losses and gains by income level in the 12th District states and in the U.S. overall

*Orange bar represents middle-income (instead of high income) in Hawai’i. Source: Paychex, Earnin, Intuit, and Kronos via Opportunity Insights and Haver Analytics.

For more details and implications for banking, visit the full First Glance 12L 3Q20 report.

Image credit: Armastas via iStock.

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The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.