Census Jobs to Boost August Employment

Payroll employment is expected to rise by 800,000 in August after hitting 1.8 million in July. The 2020 Census alone added at least 295,000 temporary hires in August by the week of the employment survey. Those workers are slated to be let go by the end of September.

The problem is hiring at the state and local levels, which was artificially boosted by nearly 250,000 jobs in July due to a glitch in the seasonal adjustment of the data; those gains could be entirely reversed in August. The move to hybrid and online schooling will exacerbate the pullback in the usual hiring of administrative and support staff for the month. Those losses are expected to be even worse in September.

Private sector payrolls are expected to rise by 750,000 in August, about half the pace of July. The leisure and hospitality sector is expected to remain a driver of overall gains but will slow considerably from the pace of July, when we saw nearly a half million jobs in food services alone.

Health care is also expected to post solid gains. Hospitals and physicians’ offices are attempting to catch up on elective surgeries and appointments postponed during lockdowns. One of the biggest hurdles I am hearing in my own doctors’ offices is childcare. Staff with children at home due to the shift to online schooling have been forced to scale back or quit. This is a large issue across wage strata. Women are getting hit harder than men by the shift to online schooling, especially parents with young children.

Hiring in professional services is expected to rise but has shifted dramatically toward temporary over permanent hires in recent months. One of the most worrisome issues is the slowdown in the pace of new job postings, especially in cities where work-from-home is more common. Large-scale layoff announcements have picked up in recent weeks, which will likely show up as weakness in September.

Retail hiring is expected to lose ground after a sharp bump in July. Retail bankruptcies and store closings compounded during August, while much of the funds provided by the Payroll Protection Plan (PPP) loans ran out. The worst of the layoffs tied to the end of PPP loans appear to have occurred after the survey week for August employment, which means additional weakness will show up in September.

Separately, the unemployment rate is expected to drop to 9.7% from 10.2%. This will mark the first time the unemployment rate has fallen below the 10% threshold since April. The misclassification of workers absent due to COVID-19 instead of unemployed has nearly disappeared. The problem is the participation rate, which could tick lower to 61.3% in August. Again, that points to women who are having to shoulder more of the burden of care for children who are not in school this fall.

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