Share
Job creation is a critical factor affecting the demand for housing and commercial real estate. In this regard, NAR is tracking the job recovery across industries. As of November 2020, the economy has regained 12.3 million of the 22.16 million nonfarm payroll jobs it lost during March-April, or a 55.5% recovery rate, with 9.3 million jobs still to recover. The job numbers show that e-commerce, housing demand, COVID-19 research/testing, and information technology services have been the factors driving job growth during May-November.
In November, the economy generated 245,000 nonfarm payroll jobs measured on a seasonally adjusted basis. This is a slower pace of job creation compared to September’s 711,000 jobs, but this is in line with the monthly pace of job creation during pre-pandemic times (233,000 during January-February 2020).
November 2020 Nonfarm Payroll Job Gains: +245,000 in 11 out of 21 industries (2-digit)
Nonfarm payroll jobs increased by 245,000 with job creation in 11 out of 21 industries (2-digit). The November jobs report shows that e-commerce transactions continues to be a strong economic and jobs growth driver, while the retail trade and the food services and accommodation industries are having a difficult time recovering lost jobs, especially with the renewed resurgence of the coronavirus pandemic that has now led to a new stay-at-home order in Los Angeles. Of the 245,000 net payroll jobs created in November, 145,000 or 59% were in transportation and warehousing, an industry that provides the logistics for the e-commerce sales. However, jobs were lost in retail trade (-34,700) and in food services and accommodation (-11,900).
Jobs increased in the administrative and waste services industry (69,500), with more workers returning their offices. As of September, only 23% of workers were working from home, compared to 35% in April. Jobs in arts, entertainment, and recreation also increased (43,100), indicating in increase in mobility and travel. Payroll jobs in construction (27,000) and real estate, rental, and leasing (8,300) also rose, as the new home sales and housing starts continue to pick to up, to 1.5 million as of October, up from 934,000 in April.
Job Recovery by Industry
The acceleration of e-commerce, housing demand, COVID-19 research/testing, and information technology services have been the factors driving job growth during May-November.
1. Finance and insurance
Only the government sector (33,000) and the finance and insurance services industry (18,000) have created net jobs since March. Low mortgage rates have fueled the demand for housing and mortgage origination. The finance and insurance services industry (NAICS 52) lost jobs in March-April (-44,000) but those losses have been more than offset by the job creation during May-November (62,000).
2. Transportation and warehousing sub industries: couriers, messengers, warehousing and storage workers
While the transportation and warehousing industry has lost 123,000 jobs since March on account of job losses in the air, water, and land transportation, there are bright spots: there were 181,900 net new jobs since March in the couriers1 (NAICS 491) and messengers (NAICS 492) and 97,100 in warehouse and storage (NAICS 493). With people working at home, retail trade shops and restaurants closed, there has been an explosion of online shopping which has meant an increase demand for last-mile delivery services, including for food services.
With reduced travel for leisure, work, or school, the largest job losses are in air transportation (-122,400) and ground transportation (-122,100).
3. Retail trade sub industries: general merchandise stores, building materials and garden supply stores, food and beverage stores, non-store retailers
the retail trade industry has lost 550,000 since March, it has some bright spots. General merchandise stores (NAICS 4523) that includes warehouse clubs and supercenters2 gained 109,400 jobs. Examples of warehouse clubs and super centers are BJ’s, Sam’s Club, and Costco. Consumer spending for essential and affordable items has increased, with more workers out of work or working reduced hours.
Jobs in building material and garden supply sub industry group (NAICS 444) jobs have increased by 96,400, presumably with homeowners engaging in remodeling and do-it-yourself projects, as they substitute leisure activities for backyard and home-based activities during this time of social distancing.
Food and beverage store jobs rose by 60,400 as people do their own cooking instead of dining out (though food delivers and curbside pickups have also become a trend).
Non-store retailer jobs, which are the jobs arising from online and mail-order sales, rose 10,900.
With the acceleration of online sales, the largest job losses are in health and personal care stores (-80,400) and department stores (-52,700).
4. Professional and businesses sub industries: Scientific research and development services
This industry group (NAICS 5417) includes workers in the physical engineering and life sciences and in the social sciences and humanities.3 This sub industry had 18,100 net new jobs. Workers doing coronavirus vaccine research will fall in this category.
With about more than occupations who work in offices still working from home, the largest job loss was in office administrative services (-690,300).
5. Health care and social assistance subgroup: Outpatient care services
Outpatient services are medical procedures or tests that can be done in a medical center without an overnight stay and include lab tests. So, workers conducting coronavirus testing fall under this category. There were 1,700 net new jobs in this sub industry, a tiny increase considering that the United States is facing an escalation in infection and deaths from the coronavirus pandemic.
With many schools still closed and as family members minimize outside contact of the elderly and children with non-family members, the largest job losses are in nursing and residential care (-251,300) and child day care services (-173,000).
6. Information services subgroup: Other information services
Payroll jobs in other information services (NAICS 519) increased by 5,000 jobs as of November compared to March. Other Information services includes news syndicates, libraries and archives, internet publishing, broadcasting, web search portals, and all other information services.
The largest job losses in Information Services is the motion pictures and sound recording sub group (198,300).
1 Couriers and messengers “pick up and deliver messages, documents, packages, and other items between offices or departments within an establishment or directly to other business concerns, traveling by foot, bicycle, motorcycle, automobile, or public conveyance and excludes light truck or delivery services drivers" according to the Bureau of Labor Statistics.
2 Warehouse Clubs and Supercenters. This U.S. industry comprises establishments known as warehouse clubs, superstores, or supercenters, primarily engaged in retailing a general line of groceries, including a significant amount and variety of fresh fruits, vegetables, dairy products, meats, and other perishable groceries, in combination with a general line of new merchandise, such as apparel, furniture, and appliances.
