One observation that didn’t make it into my Friday story on the bad-and-getting-worse employment picture is that job losses due to the coronavirus crisis are going to hit industries you don’t expect. For example, health care: You might think that’s a sector that won’t be hit by this crisis, as the coronavirus is generating all sorts of demand for health-care services, but like virtually every sector, it’s going to have parts where workers are laid off even while other parts desperately try to get as much staffing as they can.
You saw this even in the extremely partial information in Friday’s jobs report, which reflected the employment situation as of the week ending Saturday, March 14, well before the worst of the closures had hit. That report showed 43,000 fewer health-care jobs in mid-March than in mid-February. Hospital employment was almost precisely flat between the two months, but dental offices reported 17,000 fewer workers and doctors’ offices had 12,000 fewer. Since about three times as many Americans work in doctors’ offices as in dentists’ offices, that’s an especially hard hit to dental employment, which makes sense: Most dental services are not emergencies, and dental work creates significant risk of exposure to coronavirus, so many dental offices have closed, including mine, which canceled my semi-annual appointment that had been scheduled for March 18.
You can see this kind of variation in harder-hit sectors, too: The March jobs report showed moderate job losses at clothing retailers and furniture retailers, while general-merchandise retailers (a category that includes Walmart and Target) added 10,000 jobs. The job-loss trends likely got much more extreme through March: Macy’s, for example, announced it was closing all its stores on March 17, too late for the job losses at Macy’s to be reflected in the March jobs report. Those job losses in discretionary retail are being partially offset by hiring at necessity retailers like Walmart and Amazon, but overall you can expect the sector to be very hard hit by customers staying at home.
And there is another shoe that hasn’t dropped yet.
“The big underlying question now is how much the labor-market situation starts spiraling,” said Martha Gimbel, a labor economist I spoke with for Friday’s story. “There are jobs that people decided wouldn’t be affected by coronavirus because they could be done remotely, but those jobs are dependent on people paying for those services.”
All that job loss across the economy, even in sectors where you may not have known to look for it, means less spending power in households and at businesses. And that may mean less business even for enterprises that can adjust to the stay-at-home orders and keep doing business. To the extent the macroeconomic response is effective — if checks get in the hands of households that need them quickly, and loans and grants are promptly extended to businesses that are depending on them — that should do a lot to support demand overall in the economy and reduce these knock-on effects. But it is something to worry about.