Strong, steady job growth is an apt description of the second quarter of U.S. labor market. Over the last three months, the economy added an average of 375,000 jobs per month.

Americans do not experience the labor market as just an aggregate figure. Conditions evolve over time. And, importantly, disparities in access and opportunities lead to disparate outcomes that policymakers must identify and address. That is why the Biden-Harris administration and the U.S. Department of Labor are committed to ensuring equitable labor market outcomes for all.

With that fact in mind, let’s review a few important labor market dynamics from the last three months:

A rapid recovery with broad-based gains

In the second quarter of 2022, the U.S. economy added over 1 million jobs (1.12 million, pending revisions to June 2022 data). The quarterly average was 375,000 jobs. While this figure is lower than the first quarter average (539,000), decelerating job growth is a sign of a stabilizing labor market recovering from a deep recession and quick turnaround in growth. Importantly, at the end of the second quarter, private sector non-farm employment fully recovered the jobs lost in 2020 because of the coronavirus pandemic – exceeding its pre-pandemic level. This milestone happened years earlier than in prior recoveries. Total nonfarm employment is only about a 0.3 percent below pre-pandemic level, due to fewer government jobs.  But, the economy has room to add more jobs in this recovery. Typical recoveries reflect the overall fundamentals (ex. consumer spending and business investment) in the economy, producing job levels that exceed their pre-downturn levels. (see chart).

Employment relative to business cycle peak graphic.
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While broad-based job growth has led to a recovery of jobs in nearly all sectors, some have grown more quickly than others and now have employment levels that exceed their pre-pandemic levels. The sectors with the fastest recoveries are linked to industrial production and consumer spending on goods, particularly e-commerce. Whereas sectors that became higher risk during the pandemic due to their in-person work requirements and often lower wages have not fully recovered. Additionally, the speed of this recovery, combined with shifts in consumer spending, may have positive ramifications for certain groups of workers. For example, Black male employment well-exceeds its pre-pandemic level – and has done so for several months. This did not happen in the last economic recovery.

For many sectors in the economy, current jobs exceed their pre-pandemic levels graphic.
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However, even sectors that have not fully recovered are benefiting from this broad-based jobs recovery. For example, leisure and hospitality are still about 1.3 million jobs short of its pre-pandemic level. However, it lost nearly half of its workforce in the pandemic recession and has since recovered almost 7 million workers. It is also possible that a sectoral shift in the composition of the U.S. workforce is taking place, driven by changing risks to in-person work, longer-term  changes in consumer spending on services and changing business models such as more at-home work and automation.

Even sectors that have not yet fully recovered have made progress since the recession graphic.
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