• Home
  • Stock News
  • Rex Nutting: Fewer people are working in schools and local government than before the pandemic — but temp agencies are hiring plenty

Post: Rex Nutting: Fewer people are working in schools and local government than before the pandemic — but temp agencies are hiring plenty

Although the recovery in output, wealth and hours worked has been remarkable since February 2020, the U.S. economy remains deeply scarred by the COVID-19 pandemic.

Total hours worked in the nonfarm economy finally exceeded the prepandemic total in April, the Bureau of Labor Statistics reported Friday. But the number of jobs is still 1.2 million short, including 500,000 private-sector jobs.

Details: U.S. gains 428,000 jobs in April, and wages rise again—but labor force shrinks

Search for workers

Companies say they are having a hard time filling open positions because the growth of the labor force has been weak as more people retire, assume care-taking responsibilities at home, or shun unsafe or unrewarding work.

More: The only bad thing about the April jobs report might not be so bad after all

The ripple effects of the pandemic can clearly be seen in a sector-by-sector look at where employment has boomed or lagged behind since the February 2020 employment report, the last one before the pandemic locked down the economy. Many occupations that require face-to-face personal contact have been weak to recover from the shock of the pandemic.

But other sectors have stepped up hiring to meet changing working and consumption patterns, especially in transportation and warehousing, including last-mile deliveries.

Travel hit hard

Travel-related jobs have been hit hardest. Employment in accommodations (such as hotels) is down 19% (or 404,000 jobs) from prepandemic levels. Employment in travel agencies is down 31% (down 69,000 jobs).

Employment in food services and drinking places has recovered a bit better, with employment down “only” 6.4%, but that amounts to a staggering 794,000 missing jobs.

The other part of the leisure and hospitality super-sector is arts, entertainment and recreation, where employment is down 240,000 or 9.6%.

Surprisingly, a massive public-health disaster has led to lower employment in healthcare and social services. Before the pandemic hit in early 2020, it had been one of the fastest-growing sectors. As of April, employment in healthcare and social services was down 377,000 jobs (1.8%).

Education has also been hit hard by the pandemic. Employment in private and public education has fallen by 382,000, most in local public school districts, where employment has fallen 3.9%.

Local governments have lost another 278,000 jobs outside of education, more than 4% of their workforce. That accounts for most of the 340,000 noneducation jobs lost by federal, state and local governments.

Shift toward durable goods

One of the biggest consequences of the pandemic’s early stages was a massive shift in consumption toward durable goods and away from services. People were furnishing their homes and buying vehicles instead of traveling and going to movies.

At the same time, supplies of many goods were squeezed by broken supply chains. Many manufacturers had to limit production because of a lack of inputs, including skilled labor. The resulting gap between demand and supply led to an unusual surge in prices for durable goods.

Despite a lot of talk about insourcing production back to America, U.S. durable goods manufacturers have lost 105,000 jobs (1.3%) during the pandemic, most of them in aerospace, where demand recovered slowly.

Employment in nondurable manufacturing increased 46,000 (1%), led by food, chemicals and plastics.

Strong demand for goods boosted employment in retail trade by 284,000 (1.8%), led by big-box retailers, grocers, building and garden suppliers, and nonstore retailers.

Demand for shipping and delivery services exploded. Employment in transportation and warehousing rose by 674,000 (or 11.6%). Courier jobs increased by 30%, even as jobs at sightseeing companies fell 26%.

Boom in professional services

The largest job gains came in the largest sector: the catchall professional and business services, where employment rose 738,000 or 3.5%. About a third of the jobs were at temporary employment agencies. Professional services, such as legal, accounting, engineering, technical and scientific, increased by 643,000 or 6.6%. Management jobs fell by 58,000.

With monthly job gains averaging more than 500,000 over the past six months, the 1.2 million shortfall in jobs is likely to be erased soon, barring a major catastrophe.

But even once that happens, the American workplace will never be the same.

Rex Nutting has covered economics for MarketWatch for more than 25 years.

Rex Nutting columns

There’s a big hole in the Fed’s theory of inflation—incomes are falling at a record 10.9% rate

Inflation inequality is hitting the working class harder than at any other time on record

Gas prices are way up, but real cost of driving a mile was higher for most of the past century

Add Your Heading Text Here

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Market Insiders