Employers added 1.8M jobs in July, including 900 in accounting
Employment rose by 1.8 million jobs in July, including 900 in accounting and bookkeeping services, and the unemployment rate fell to 10.2 percent from 11.1 percent, the U.S. Bureau of Labor Statistics reported Friday, as the economy showed signs of recovery despite the spread of the novel coronavirus across many parts of the country.
The BLS noted that the improvements in the labor market reflected the continued resumption of economic activity that had been curtailed due to the COVID-19 pandemic and efforts to contain it. Some of the notable job gains last month happened in the leisure and hospitality sector, government, retail trade, professional and business services, other services, and health care. Average hourly earnings rose 7 cents to $29.39,
The BLS also revised upward the job gains for May by 26,000, from a gain of 2,699,000 jobs to 2,725,000, but the June numbers were revised downward by 9,000, from a gain of 4,800,000 jobs to 4,791,000. With those two revisions, employment in May and June combined was 17,000 higher than previously reported. So far, the economy has recovered less than half the number of jobs lost due to the pandemic. The 1.8 million jobs aded in July indicates the pace of hiring is slowing down.
Employment in professional and business services increased by 170,000 in July but it’s still 1.6 million below its February level. The majority of July's gain occurred in temporary help services, which rose by 144,000 jobs.
“The thing that’s interesting in the BLS data specifically is the amount of temporary workers,” said Phil Noftsinger, executive vice president at CBIZ, a Top 100 Firm. “We saw this in the ’09 recovery where businesses said we have work, but we’re not ready to make a long-term commitment to an employee at this point, so we’ll bring people back to do the work on a temporary basis or a part-time basis. That’s probably also true in the accounting space where furloughed or potentially laid off workers may be coming back on a temporary basis, maybe even on a 1099 basis, to try to accomplish some of the work that’s there. In July we obviously had a big tax-filing deadline. So there was probably more work in the June-July time frame for accounting firms than you would typically see during that time of year.”
CBIZ released its own Small Business Employment Index on Friday. For companies with 300 or fewer employees, CBIZ reported a seasonally adjusted improvement of 1.25 percent in small business hiring for July 2020, an uncharacteristically high figure for the month. Indicators suggest this rise came from the continued economic recovery. According to the index, 29 percent of companies increased hiring, 50 percent left hiring unchanged, while 21 percent decreased their hiring. The CBIZ SBEI showed hiring growth in the majority of industries, including arts and entertainment, accommodation and food services, construction, healthcare, real estate, retail trade, manufacturing, technology and life sciences, as well as professional services. The exceptions were educational services, nonprofits and transportation, as hiring declined in these industries. All four U.S. regions reported seasonally adjusted hiring growth in July. However, the West and Central regions experienced more modest growth than the Northeast and Southeast.
Overall, the BLS numbers beat analyst expectations. “It’s good news,” said Noftsinger. “We all need to be careful. A good portion of people are doing their part, but we all need more people to do their part to keep it going.”