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The Industries Hit Hardest By The Unemployment Crisis

On Thursday, the U.S. Department of Labor reported that 2.98 million more Americans had filed for unemployment insurance in the previous week, bringing the total for claims since March 8 up to 36.8 million. Last week’s jobs report for the month of April estimated the national unemployment rate at 14.7 percent, and Thursday’s report implies that perhaps another 2.5 percent of the labor force has filed for benefits since the beginning of May.1

It’s a grim situation, though not every area has been hit equally hard. So which parts of the economy have seen the most damage? Using data from the most recent jobs report, I dug into changes in total nonfarm employment by sector from February — the last full month before the coronavirus-triggered economic crisis truly began — to April, starting at the ”supersector” level, or the most broadly grouped parts of the economy:

Which major industries are hit hardest by unemployment?

Economic “supersectors” by percent change in seasonally adjusted nonfarm employees from February to April 2020

Employees (millions)
Supersector Feb. Mar. Apr. 2 mo. % chg.
Leisure and hospitality 16.9 16.4 8.7 -48.3%
Other services 5.9 5.9 4.6 -22.0
Construction 7.6 7.6 6.6 -13.2
Trade, transportation and utilities 27.8 27.8 24.7 -11.2
Education and health services 24.6 24.5 21.9 -10.8
Manufacturing 12.9 12.8 11.5 -10.6
Professional and business services 21.6 21.5 19.3 -10.4
Information 2.9 2.9 2.6 -8.9
Mining and logging 0.7 0.7 0.7 -8.0
Government 22.7 22.7 21.7 -4.4
Financial activities 8.8 8.8 8.6 -3.0

Source: bls.gov

Over the past few months, every single major area of the U.S. job market has shrunk at least some. But it’s clear that the leisure and hospitality industry was hurt far more than any other. In February, nearly 17 million Americans worked in that supersector, which comprises the arts, entertainment and recreation sector — including spectator sports and gambling — and the accommodations and food services sector. By April, that number had fallen by nearly 50 percent, to just 8.7 million.

The leisure and hospitality fields suffered heavy job losses

Percent change in seasonally adjusted leisure and hospitality employees from February to April 2020, by supersector, sector and subsector

Employees (millions)
Industry Feb. Mar. Apr. 2 mo. % chg.
All leisure and hospitality 16.9 16.4 8.7 -48.3%
Arts, entertainment and recreation 2.5 2.4 1.1 -54.5
Performing arts and spectator sports 0.5 0.5 0.3 -45.4
Museums, historical sites and similar institutions 0.2 0.2 0.1 -26.1
Amusements, gambling and recreation 1.8 1.8 0.7 -59.9
Accommodation and food services 14.4 13.9 7.6 -47.3
Accommodation 2.1 2.0 1.2 -42.3
Food services and drinking places 12.3 11.9 6.4 -48.1

Source: bls.gov

Nearly all the jobs in this supersector involve some form of in-person services rendered for gatherings of people — which, of course, became impossible to maintain when social distancing requirements were put in place by local authorities. As such, leisure and hospitality businesses were always going to struggle under the pandemic’s terrible constraints. Every subsector of this industry has lost at least 25 percent of its employees since February, and most have lost 40 percent or more. Among all the sectors and subsectors tracked by the Bureau of Labor Statistics for the month of April,2 only one — scenic and sightseeing transportation, which falls under the umbrella of trade, transportation and utilities — saw more job losses than amusements, gambling and recreation, which shed 60 percent of its employees in a two-month period.

Although it wasn’t hit as hard as leisure and hospitality, the “other services” supersector also saw a 22 percent reduction in positions from February to April. That area has three subsectors:

Services are struggling (especially hairdressing and laundry)

Percent change in seasonally adjusted “other service” supersector employees from February to April 2020, by supersector and subsector

Employees (millions)
Industry Feb. Mar. Apr. 2 mo. % chg.
All other services 5.9 5.9 4.6 -22.0%
Personal and laundry services 1.5 1.5 0.7 -53.5
Repair and maintenance 1.4 1.4 1.2 -16.5
Membership associations and organizations 3.0 3.0 2.8 -8.5

Source: bls.gov

None is doing particularly well, but by far the biggest unemployment disaster has played out in personal and laundry services, which includes hairdressing, dry cleaning, laundromats and a vast array of other service jobs such as pet care, dating services, photofinishing, parking-lot services and so forth. The struggles of hairstylists and cosmetologists during this crisis are well-documented, as these professions made up more than half the jobs in this supersector in 2019. And although laundry workers have been deemed essential in some states, many have seen business volume drop significantly — not only because customers have been avoiding unnecessary trips outside but also because homebound teleworkers aren’t dressing as nicely as they otherwise would. As a result, the number of employees working in that slice of the economy has fallen by 54 percent since February.

For most other supersectors, jobs have dropped by somewhere between 8 and 13 percent since before the coronavirus crisis started, meaning almost every corner of the economy has been touched by the pandemic. The only areas experiencing more modest (though still significant) losses were in government — with workers at the federal level faring better than their state or local counterparts — and financial activities:

Financial and government jobs are weathering the storm

Percent change in seasonally adjusted financial activities and government supersector employees from February to April 2020, by supersector, sector and subsector

Employees (millions)
Industry Feb. Mar. Apr. 2 mo. % chg.
All financial activities 8.8 8.8 8.6 -3.0%
Finance and insurance 6.5 6.5 6.5 -0.5
Monetary authorities – central bank 0.0 0.0 0.0 +2.1
Credit intermediation and related activities 2.7 2.7 2.7 -1.0
Securities, commodities, investments, funds, trusts 1.0 1.0 1.0 -0.4
Insurance carriers and related activities 2.8 2.8 2.8 -0.2
Real estate and rental and leasing 2.4 2.4 2.1 -9.7
Real estate 1.8 1.7 1.6 -5.9
Rental and leasing services 0.6 0.6 0.5 -21.5
Lessors of nonfinancial intangible assets 0.0 0.0 0.0 -2.5
All government 22.7 22.7 21.7 -4.4
Federal government 2.9 2.9 2.9 +0.7
Federal, excluding U.S. Postal Service 2.3 2.3 2.3 +0.9
U.S. Postal Service 0.6 0.6 0.6 -0.2
State government 5.2 5.2 5.0 -4.3
State government education 2.5 2.4 2.3 -8.8
State government, excluding education 2.7 2.7 2.7 -0.3
Local government 14.7 14.7 13.9 -5.5
Local government education 8.0 8.0 7.6 -5.9
Local government, excluding education 6.6 6.6 6.3 -4.9

Source: bls.gov

The central bank and federal government (excluding the U.S. Postal Service) had more jobs in April than in February, an absolute rarity in the current economic climate. But even among the supersectors weathering things best, certain areas have seen plenty of job losses: The real estate market is teetering on the edge of a rent crisis, as unemployed tenants struggle to make payments, and rental/leasing jobs are down more than 20 percent from a few months ago. Both state and local government education are also down more than the overall government average over the past few months.

But those areas are still doing better than some others. If we dig deeper into the subsectors of the economy, the differences between those with the heaviest and lightest job-loss numbers are striking:

Which subsectors lost jobs — and which are surviving?

Subsectors with the largest and smallest percent change in seasonally adjusted employees from February to April 2020, by size of subsector

Large subsectors
Largest Losses 2 mo. % chg. Smallest Losses 2 mo. % chg.
Amusements, gambling and recreation -59.9% Federal government, excluding U.S. Postal Service +0.9%
Food services and drinking places -48.1 Insurance carriers and related activities -0.2
Accommodation -42.3 State government, excluding education -0.3
Transportation equipment -24.4 Credit intermediation and related activities -1.0
Administrative and support services -18.0 Food and beverage stores -1.5
Medium subsectors
Largest Losses 2 mo. % chg. Smallest Losses 2 mo. % chg.
Clothing and clothing accessories stores -58.9% Couriers and messengers +0.1%
Personal and laundry services -53.5 U.S. Postal Service -0.2
Performing arts and spectator sports -45.4 Securities, commodity contracts, investments, and funds and trusts -0.4
Transit and ground passenger transportation -37.4 Telecommunications -0.8
Sporting goods, hobby, book and music stores -36.2 Computer and electronic products -0.9
Small subsectors
Largest Losses 2 mo. % chg. Smallest Losses 2 mo. % chg.
Scenic and sightseeing transportation -62.1% Monetary authorities – central bank +2.1%
Motion picture and sound recording industries -48.3 Other information services +1.0
Furniture and home furnishings stores -46.3 Pipeline transportation +0.0
Apparel -40.6 Rail transportation -1.7
Museums, historical sites and similar institutions -26.1 Data processing, hosting and related services -2.0

Category sizes are based on whether the area ranked among the top, middle or bottom third of subsectors in total employment in February 2020.

Source: BLS.gov

Not surprisingly, the largest losses at this level have also disproportionately hit the retail, service and hospitality subsectors. But no matter the size of the industry, only a few areas managed to resist a net decline in employees, compared with their pre-coronavirus norms.

With even more people filing unemployment claims every day that the coronavirus lockdowns continue, these numbers are likely to get even worse. By definition, recessions always exact a terrible toll on the job market. But this one is unusual in just how many people are out of work — and how wide-ranging the unemployment has already been.



Would it hurt the economy to let people die from coronavirus? l FiveThirtyEight

Footnotes

  1. Not all these people will show up in the official unemployment number by the end of May. Some may find jobs in between, and some may stop looking. Unemployment rate and initial claims are computed through very different processes, but this number gives at least a sense of the ongoing scale of the crisis.

  2. Some very specific sub-subsectors don’t have April data yet.

Neil Paine is a senior writer for FiveThirtyEight.

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