Last week’s Bureau of Labor Statistics report on the June employment situation was celebrated for good reason. News that 4.8 million jobs had been filled in June, and that May’s previous 2.1 million count of new hires had been raised to 2.8 million, gave a clear indication that when people forced to take refuge in their homes are allowed to go to work, they eagerly get their names on a payroll.
Even with some good news emanating from the coronavirus command economy, there remains a general awareness that we are a long way from glory land. More than 30 million people are unemployed, and the current employment level lies more than 12 million below the February number. Closer examination of the BLS report tells us that the largest part of the employment gains, some 2.1 million, came in the hospitality industry — hotels, eating and drinking places. Of course, this was also the part of the economy hardest hit by the virus, and therefore the sector that could gain the most back as things reopen.
Still, with more people working and spending, there are signs of real life in the beleaguered coronavirus economy. Importantly, there are continuing gains in construction employment, and last week’s report on real estate sales (inspired by historically low costs for financing construction activity) offers a rather sunny outlook for that industry.
As with all BLS employment reports, the data received came from two sources: household surveys done by real people and payroll data from the nation’s businesses. And as is always the case, the survey data is gathered during the first half of the month being examined. It’s worth pointing out that June’s first half looked better from the standpoint of new coronavirus cases than the month’s second half. The bad news on the virus, in some cases, brought state rollbacks in efforts to reopen the economy. This suggests that July’s employment situation is starting from a weaker position.
But countering this real concern is some recent data from the hospitality industry itself that still gives a positive outlook. Here, we revisit OpenTable reporting of daily year-over-year percentage changes for seating availability in U.S. restaurants, this time spanning June 17 through July 2 (shown in the below chart). Seating vacancies expanded until June 27 and then began to tighten as more people presumably decided they were comfortable having dinner out. Obviously, the recovery path is filled with potholes.
In any case, we should be thankful that the Great American Bread Machine, crippled as it may be by the virus and policies taken to counter it, can still produce jobs, and lots of them. Let’s hope July brings another dose of good news.
Bruce Yandle is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a distinguished adjunct fellow with the Mercatus Center at George Mason University and dean emeritus of the Clemson University College of Business & Behavioral Science. He developed the “Bootleggers and Baptists” political model.
