Winers & Losers

[paserbyp]

Lets take a look closely through the August jobs report from the U.S. Bureau of Labor Statistics to good and bad news of any sort to report on.

Despite some positive news on the hiring front—about one in ten manufacturers has added new jobs, for example—every sector of the economy has experienced a decline in the overall number of positions. As shown in the chart below, the dip in employment ranges from minimal (1.2% for financial activities) to truly off-a-cliff (31% for leisure and hospitality.)

And it may get worse before it gets better. In many of the worst-hit sectors, the declines in consumer purchases and company revenues are still far larger than the declines in employment that have taken place to date and that suggests that more layoffs and business closures may be on the way—or at least that the recovery could hit a limit.

But there’s a story behind the numbers, and it’s especially compelling in the professional business services sector, the U.S. economy’s biggest segment and the one in which many engineering-related jobs get categorized. The nearly 100 industries that make up the sector, only four have seen employment growth since the start of the pandemic. They are: Veterinary services (+1.2%), credit bureaus (+1.35%), biotechnology research and development (+2.0%) and tax preparation services (+9.6%). (Note: The subcategory numbers are through July 2020.)

Meanwhile, the rest of the industries in the sector experienced losses ranging from minor to catastrophic, the hardest hit being tour operators (-42.5%), convention and trade show organizers (-35.5%) and travel agencies (-32.8%).

Another sector with engineering jobs, manufacturing, has fared better than in past recessions and during the coronavirus pandemic, the percentage decline has actually been smaller than the overall decline. Employment in the sector fell from 12.9 million in February to 12.1 million in August, a smaller loss than in the same period in 2009.

Manufacturers of surgical appliances and supplies have expanded capacity to produce ventilators and masks, and producers of video game consoles have ramped up production to meet skyrocketing demand. And while manufacturers of cars, clothes, and dental products have downsized their payrolls by more than 15%, breakfast cereal manufacturers are ramping up production.

Despite the softness in the economy, it was encouraging about prospects for engineers and software developers. With companies like Lowes, Home Depot, and Walmart consistently on job’s list of top hiring companies since the start of the pandemic, that tech-savvy employees are in high-demand to develop company websites, inventory management systems, and E-commerce platforms.