July figures show more than half of payroll jobs lost to pandemic recovered
Based on July figures, the Kansas City economy has now recovered more than half the payroll jobs it lost during the shutdown of the economy in March and April in response to the COVID-19 pandemic. In July, the Kansas City area economy added 21,000 jobs and, when combined with the 34,500 jobs added in June and the 15,400 jobs added in May, the region’s non-farm wage and salary employment has grown by 70,900 in the past three months, clawing back 56% of the 125,700 jobs it lost in March and April. Although this still leaves the region 54,800 jobs below its pre-recession peak, this recent rate of increase means the region ranks second in job growth over the past 12 months compared to the 13 Workforce Indicator peer metros.
The region’s unemployment rate, however, showed only minor improvement in July to 7.6% compared to 7.8% in June. The June drop was huge, however — three full percentage points — and combined with an improving employment picture, this may have pulled more people into the labor force in July. Still, the Kansas City area unemployment rate today is nearly double the 4 % rate of a year ago, resulting in tens of thousands of residents unable to find jobs.
Most of the job losses appear to be concentrated in the Leisure and Hospitality industry, which is down 23,100 jobs from one year ago. (Industry employment is not seasonally adjusted so meaningful comparisons can only be made to the same month last year.) Professional and Business Services has also been hard hit, losing 9,300 jobs over the past year, followed by Health and Education Services (down 6,800 jobs), Finance and Insurance (down 3,800 jobs) and Wholesale Trade (down 2,400 jobs). Interestingly, Retail Trade employment (which includes stores, not restaurants) is essentially flat relative to this time last year. Construction, which has 3,400 more jobs this year than last, and Federal Government, which has 1,800, are the sectors that have performed the best.
Looking ahead, the rebound in the economy is expected to slow considerably as the impact of federal programs to connect workers back with their employers expire and the next round of relief measures for the unemployed are likely to be less generous. The path of the economic recovery will follow the course of the virus and, therefore, a full recovery is not likely to occur until after an effective vaccine is widely distributed.