As May’s job report reveals, unemployment is definitely down from April, whether the current figure is 13.3 percent or 16.4 percent when those who are misclassified are counted. While it’s true that, as the Bureau of Labor Statistics (BLS) suggests, employment rose “sharply” in such sectors, such as leisure and hospitality, construction, education and health services, and retail, the record-breaking losses of the previous three months make “sharply” a relative term. For instance, although employment in leisure and hospitality increased by 1.2 million in May, it is still down 7 million since February.

For those in the multifamily industry, digging deeper into the May employment report revealed the following nuggets:

  • Residential construction was not hit as badly as other sectors of the economy and made up slightly more than half its losses since March. It is now down 6.6 percent.
  • Job losses in nursing care facilities continued, though at half the monthly rate as in April. These losses have not been substantial. Employment is down just 4.1 percent from March.
  • There was a turnaround in real estate and rental and leasing employment. It is now down 8.4 percent from a low of 9.4 percent, picking up 24,100 jobs in May.

It’s difficult to connect the dots, but the image that does emerge is of an industry, at least so far, that is holding up.

Geography Makes a Difference

The BLS requires an extra month to break down its employment statistics by metropolitan area. As a result, just a few days before it released its May job report, it published its April metro summary. Surprisingly, cities with high concentrations of COVID-19 cases had only slightly elevated unemployment rates compared to the country as a whole. At the end of April, unemployment was 14.7 percent. According to an analysis of May 1 data by the Sacramento Bee, the unemployment rates at the top four cities were New York, 15.1 percent; New Orleans, 18.8 percent; Boston, 15.4 percent; and Providence, 18.2 percent.

It should come as no surprise, though, that the jump in unemployment was significantly more dramatic in cities whose economies are dependent on sectors vulnerable to the shutdown, especially leisure and hospitality. The Kahului-Wailuku-Lahaina area  — think Maui — had the highest unemployment rate in April, an eye-watering 35.0 percent, and the largest year over year increase of 32.5 percentage points. Las Vegas-Henderson-Paradise MSA had the highest unemployment rate in April of cities of a million or more, 33.5 percent.

But other factors come into play. Yardi® Matrix published an analysis in April identifying the metropolitan areas whose employment it felt was most likely to be impacted by shelter-in-place policies. Their analyst considered retail, mining, logging, and construction, as well as leisure and hospitality, as bellwether sectors. Not surprisingly, Las Vegas was at the top of the list, but of the four Florida areas in the top 10 — Southwest Florida Coast, Orlando, Ft. Lauderdale, and Miami — only Orlando’s unemployment exceeded the national average in April. Florida’s more flexible attitude toward social distancing — whatever its effect on flattening the pandemic curve — clearly flattened the increase in unemployment.

A Moving Target

Managing employment in this time of COVID-19 is still a work in progress — both for individual employers and the federal government. There are two major questions going forward. First, with cities and states opening up and the murder of George Floyd bringing hundreds of thousands of people into the streets, have we effectively run the pandemic clock back to March? And second, will Congress enact programs that extend the benefits of the Paycheck Protection Program and unemployment supplements? The August and September job reports will tell that tale.

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