U.S. employers in July fully replaced the 22 million jobs lost at the start of the pandemic and the unemployment rate returned to a half-century low, showing the vastly changed labor market has recovered from the tumult created by Covid-19.
With the 528,000 added jobs last month, the U.S. economy gained back all the jobs lost early in the pandemic, the Labor Department said on Friday. The unemployment rate also fell to its prepandemic half-century low of 3.5%.
Even with the jobs recovery, the labor market has changed in many ways. Wages are rising at a much more rapid rate. Fewer Americans are seeking work. And some industries, such as those tied to e-commerce and goods production, have fully recovered, while others, including healthcare and restaurants are well short of prepandemic levels.
Here is a breakout of how different industries and demographic groups have fared as the U.S. labor-market recovery reaches a historic moment.
Leaders and Laggards
A shift to e-commerce has helped drive up employment in transportation and warehousing during the pandemic. The sector was still churning out jobs last month, adding about 21,000 workers. Warehouse employment was up by 36% in July 2022 compared with February 2020 just ahead of the pandemic. Couriers and messenger companies, which deliver packages to homes, also logged double-digit payroll growth over this period.
Manufacturing employment is now slightly above prepandemic levels. Employment at semiconductor manufacturers increased 0.9% in July from a month earlier and is also above February 2020 levels, which should help ease chips shortages that have roiled supply chains and auto production.
Payrolls by sector in July, change from February 2020
Professional and business services
Trade, transportation and utilities
Education and health services
Professional and business services
Trade, transportation and utilities
Education and health services
Professional and business services
Trade, transportation and utilities
Education and health services
Professional and
business services
Trade, transportation
and utilities
Education and
health services
Professional and
business services
Trade, transportation
and utilities
Education and
health services
Payrolls in the leisure and hospitality sector—which includes restaurants, bars and hotels—remain down by 7.1% from February 2020 levels, after falling nearly 50% in the first two months of the pandemic.
The sector has added jobs each month since the start of 2021, including 96,000 in July. Many economists expect the leisure sector to help drive payrolls growth in the coming months, as it has more room to recover and could benefit from continued demand for travel and summer vacations.
Worker Demographics
Unemployment rates have tracked similarly for men and women throughout much of the pandemic, after the initial onset of Covid-19 drove up joblessness more sharply for women.
Women tend to work in roles in healthcare and food preparation that suffered steep job cuts in the spring of 2020. Employers in those industries have since brought back large numbers of workers, sending the female jobless rate down to 3.4% in July 2022 from a peak of 16.1% in April 2020. The male unemployment rate logged in at 3.5% last month, down from 13.5% in April 2020.
Jobless rates have also varied by race, pointing to an uneven recovery for workers. Unemployment among Black Americans was 6% in July, well above rates for whites, Hispanic and Asian workers.
Wage Pressures
The historically low jobless rate is propelling wage gains as companies compete for a limited pool of workers. Average hourly earnings for private-sector workers rose 5.2% in July from a year earlier, far exceeding February 2020’s annual gain of 3.1%. Faster wage growth hasn’t kept pace with inflation, which hit a nearly 41-year high of 9.1% in June.
The robust wage gains point to greater worker bargaining power but could also keep inflation elevated. Companies often pass along price increases to compensate for their higher labor costs.
Write to Sarah Chaney Cambon at [email protected]
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Appeared in the August 6, 2022, print edition as ‘Jobs Revival Shows Labor Market Shift.’
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