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BLS Releases July 2020 Employment Situation (Aug. 2020)

08.07.2020

Total nonfarm payroll employment rose by 1.8 million in July, and the unemployment rate fell to 10.2 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it. In July, notable job gains occurred in leisure and hospitality, government, retail trade, professional and business services, other services, and health care.

Employment in leisure and hospitality increased by 592,000, accounting for about one-third of the gain in total nonfarm employment in July. Employment in food services and drinking places rose by 502,000, following gains of 2.9 million in May and June combined. Despite the gains over the last 3 months, employment in food services and drinking places is down by 2.6 million since February. Over the month, employment also rose in amusements, gambling, and recreation (+100,000).

Government employment rose by 301,000 in July but is 1.1 million below its February level. Typically, public-sector education employment declines in July (before seasonal adjustment). However, employment declines occurred earlier than usual this year due to the pandemic, resulting in unusually large July increases in local government education (+215,000) and state government education (+30,000) after seasonal adjustment. A July job gain in federal government (+27,000) reflected the hiring of temporary workers for the 2020 Census.

In July, retail trade added 258,000 jobs. Employment in the industry is 913,000 lower than in February. In July, nearly half of the job gain in retail trade occurred in clothing and clothing accessories stores (+121,000). By contrast, the component of general merchandise stores that includes warehouse clubs and supercenters lost jobs (-64,000).

Employment in professional and business services increased in July (+170,000) but remains 1.6 million below its February level. The majority of July’s gain occurred in temporary help services (+144,000). In July, the other services industry added 149,000 jobs, with most of the increase occurring in personal and laundry services (+119,000). Since February, employment in other services is down by 627,000.

In July, health care added 126,000 jobs, with employment growth in offices of dentists (+45,000), hospitals (+27,000), offices of physicians (+26,000), and home health care services (+16,000). Job losses continued in nursing and residential care facilities (-28,000). Employment in health care is down by 797,000 since February.

In July, employment in social assistance increased by 66,000, with child day care services accounting for most of the gain (+45,000). Employment in social assistance is 460,000 lower than in February. Employment in transportation and warehousing rose by 38,000 in July, following an increase of 87,000 in June. Despite job gains over the past 2 months, employment in the industry is down by 470,000 since a recent peak in January. In July, employment rose in transit and ground passenger transportation (+20,000), air transportation (+16,000), and couriers and messengers (+9,000).

Manufacturing employment increased by 26,000 in July. An employment gain in motor vehicles and parts (+39,000) was partially offset by losses in fabricated metal products (-11,000), machinery (-7,000), and computer and electronic products (-6,000). Although manufacturing has added 623,000 jobs over the past 3 months, employment is 740,000 lower than in February.

Financial activities added 21,000 jobs in July, with most of the gain in real estate and rental and leasing (+15,000). Since February, employment in financial activities is down by 216,000.

In July, construction employment changed little (+20,000), following job gains of 619,000 in May and June combined. However, employment in the industry remains 444,000 below its February level. Mining continued to shed jobs in July (-7,000), reflecting a loss in support activities for mining (-11,000). Mining has lost 127,000 jobs since a recent peak in January 2019, although nearly three-fourths of this decline has occurred since February 2020.

In July, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $29.39, following large changes in recent months. Average hourly earnings of private-sector production and nonsupervisory employees decreased by 11 cents to $24.63 in July. The large employment fluctuations—especially in lower-paid industries—over the past several months complicate the analysis of recent trends in average hourly earnings.

The full BLS press release on the July 2020 employment situation can be accessed in the link below:

The next Employment Situation for August 2020 is scheduled to be released on Friday, September 4, 2020. 


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Gross Domestic Product, Second Quarter 2020 (First Estimate) (July 2020)

07.30.2020

Coronavirus (COVID-19) Impact on the Second-Quarter 2020 GDP Estimate: The decline in second quarter GDP reflected the response to COVID-19, as “stay-at-home” orders issued in March and April were partially lifted in some areas of the country in May and June, and government pandemic assistance payments were distributed to households and businesses. This led to rapid shifts in activity, as businesses and schools continued remote work and consumers and businesses canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the second quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified.

Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020, according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent. The decrease in real GDP reflected decreases in personal consumption expenditures (PCE), exports, private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending that were partly offset by an increase in federal government spending. Imports, which are a subtraction in the calculation of GDP, decreased. The decrease in PCE reflected decreases in services (led by health care) and goods (led by clothing and footwear). The decrease in exports primarily reflected a decrease in goods (led by capital goods). The decrease in private inventory investment primarily reflected a decrease in retail (led by motor vehicle dealers). The decrease in nonresidential fixed investment primarily reflected a decrease in equipment (led by transportation equipment), while the decrease in residential investment primarily reflected a decrease in new single-family housing.

 


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State of Vermont Agency of Administration Monthly Revenue Release (July 2020)

07.24.2020

On July 24, 2020, Secretary of Administration Susanne Young released Vermont state revenue results for June 2020 and for the fiscal year 2020 overall.  The Secretary noted that a more complete accounting of state revenue receipts would be forthcoming following the July 15th extended filing and payment deadlines for Personal Income Tax and Corporate Income Tax revenues.  Even so, the Secretary noted that …”Thanks to a combination of strong public health actions to moderate the impact of COVID-19 in Vermont – and strong fiscal discipline from the Administration and the Legislature – the General Fund will likely end fiscal 2020 in solid financial shape after deferred fiscal 2020 tax receipts are recognized on a modified accrual basis. Vermont is also benefiting from the relative strength of our economy reflected in 2019 personal and corporate tax earnings…”. 

Click on the .pdf below to download the Secretary’s comments concerning Vermont revenues.


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BLS Releases June 2020 Consumer Price Index (July 2020)

07.14.2020

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in June on a seasonally adjusted basis after falling 0.1 percent in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 0.6 percent before seasonal adjustment.

The gasoline index rose sharply in June after recent declines and accounted for over half of the monthly increase in the seasonally adjusted all items index. The energy index increased 5.1 percent in June as the gasoline index rose 12.3 percent. The food index also rose in June, increasing 0.6 percent as the index for food at home continued to rise.

The index for all items less food and energy rose 0.2 percent in June, its first monthly increase since February. The index for motor vehicle insurance increased sharply in June after recent declines. The indexes for apparel, shelter, and medical care also increased in June, while the indexes for used cars and trucks, recreation, and communication all declined.

The all items index increased 0.6 percent for the 12 months ending June; this compares to a 0.1-percent increase for the 12 months ending May. The index for all items less food and energy increased 1.2 percent over the last 12 months. The food index increased 4.5 percent over the last 12 months, with the index for food at home rising 5.6 percent. Despite increasing in June, the energy index fell 12.6 percent over the last 12 months.

Next release is Wednesday, August 12, 2020, for the July 2020 Consumer Price Index.


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BLS Releases June 2020 Employment Situation (July 2020)

07.02.2020

Economy regains 4.8 million jobs in June and unemployment at 11.1 percent

Unemployment fell and the U.S. economy added back 4.8 million jobs in June, according to the latest Employment Situation report issued by the U.S. Bureau of Labor Statistics on July 2.  This follows a gain of 2.7 million (revised up by 200,000) in May.  U.S. employers have added back 7.5 million jobs of the 22.2 million jobs lost since the onset of the coronavirus pandemic in February, sparking hopes for a faster rebound in the labor market. 

The unemployment rate fell to 11.1 percent from 13.3 percent in May; though this still understates the actual drop since the number of people misclassified as unemployed fell from 3.0 percent in May to 1.0 percent in June.  More importantly, June figures were collected before a surge of coronavirus infections in several large states, including Florida, Texas, Arizona, and California, causing many officials to reimpose some restrictions introduced during initial lockdowns.

The job gains were primarily in sectors most affected by the lockdown.  Leisure and hospitality jobs increased by 2.1 million, accounting for about two-fifths of the gain in total nonfarm employment. Restaurants and bars jobs rose by 1.5 million; despite these gains employment is down by 3.1 million since February.  Jobs were also returning to amusements, gambling and recreation; and in accommodations.  Employment in retail trade rose by 740,000 in June, after a gain of 372,000 in May; on net, the industry is 1.3 million lower than in February.

Employment gained across major services sectors including education and health services (568,000); other services (357,000); professional and business services (306,000), transportation and warehousing (99,000), wholesale trade (68,000); and financial activities (32,000). 

On the goods producing side, manufacturing employment rose by 356,000 jobs in June; still down by 757,000 since February.  Construction hired back 158,000 workers in June; following a gain of 453,000 jobs in May.  These gains accounted for more than half of the decline of 1.1 million occurring in March and April.  Mining continued to lose jobs (-10,000) in June; mining is down by 123,000 since its peak in January. 

Government employment gains were modest (+33,000) in June; overall employment in government is 1.5 million below its February level.  This figure may increase sharply as governments enter their new fiscal year with massive revenue-cost imbalances unless Congress appropriates direct assistance. 

The diffusion index of employment—a measure of the dispersion of change—increased to 75.2.  This broad-based index provides insight into the breadth of employment change across 258 different private sectors.

On the household side, the picture is reinforced by a strong but uneven rebound.  People who were earlier on temporary layoff are getting their jobs back.  In April, 18.6 million were furloughed; in June it is now down to 10.6 million; accounting for about three-fifths of all unemployed.  In addition, the number of unemployed who are reentrants rose sharply from 1.5 million in April to 2.4 million in June.  These represent significant positives in the labor market.  However, more than 4.6 million people have dropped out of the labor force since February.  About 1.9 million of those that left the labor market were under the age of 25 years.  Nearly 1 million of those workers are prime-age (between 25-64 years) women.  Another 900,000 workers over the age of 65 years left the work force. 

The overall employment-to-population ratio (EPOP) is down by 6.5 percent since February.  For minorities the decline is much greater; for Blacks it is down by 8.6 percent; for Hispanics, by 10.3 percent; and for Asians, the EPOP is down by 9.9 percent. 

In sum, this is a mostly positive report, indicating that the economy is on the rebound; though there is a long path of recovery.  With additional funding needed from Congress for the unemployed and for state and local government finances and the resurgent pandemic in several states, the recovery may stall. 

The full BLS press release on the June 2020 employment situation can be accessed in the link below:

The next Employment Situation for July 2020 is scheduled to be released on Friday, August 7, 2020. 


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