On Friday, the Bureau of Labor Statistics (BLS) will release September’s numbers on the state of the U.S. labor market. August employment growth came in lower than June or July due in part to the Delta variant spreading quickly. Another sign of weakness in the August job report was the rise of Black unemployment, which remains significantly higher than other groups. The August jobs report showed us, once again, just how much the ebbs and flows of the pandemic are the dominant influence by far on trends in the labor market. This pronounced August slowdown also came after more than half of all states prematurely ended the pandemic unemployment insurance (UI) programs. All of the pandemic programs ended in early September. While no longer accelerating, COVID-19 caseloads were still high in mid-September compared with the early summer months, so that may once again slow the recovery. In this jobs report, one indicator I’m going to be paying close attention to is public-sector employment, specifically public-sector education employment. Overall government employment is still down 790,000 jobs since February 2020—the third largest employment deficit in any economic sector—but this shortfall is entirely in state and local employment and much of those losses were in education employment. Local education employment—think the public K-12 school system—cratered in the spring of 2020, experiencing losses in excess of those suffered in the Great Recession and, as of mid-August, remained 219,600 short of its pre-pandemic level. In late August and early September, many schools across the country reopened their doors to in-person schooling five days a week for the first time since March 2020. As a result, I expect a significant pickup in local education employment. However, there is a catch. Every year, education employment spikes in September, but seasonal adjustment factors instituted by BLS moderate those gains in order to remove seasonality. This makes sense—the same thing happens with retail employment in December. That’s when retail employment tends to spike in response to holiday shopping, and seasonal adjustments remove that bump so analysts can better ascertain the underlying trends. This is also why when the weather is unseasonably bad (or good) employment may decrease (or increase) more than expected in a usual season. Here’s how this phenomenon plays out in public K-12 employment. In the figure below, if you look at 2017 through 2019, you can see how the red line (seasonally adjusted series) offsets the cycles of the blue line (nonseasonally adjusted series) to yield the underlying longer-term trends of education employment slowly rising year after year. The nonseasonally adjusted series (NSA) can be considered the actual level of employment in that sector, while the seasonally adjusted series (SA) is the one that gets more often reported for its consistency across months within a year. Eyeing the nonseasonally adjusted series, you can see a large dip in the summer months and a smaller dip in January for each of those years as you would given the typical school year. Enter the pandemic. In spring 2020, both the seasonally and nonseasonally adjusted series fell sharply. But in September 2020, nonseasonally adjusted employment rose quickly, though the seasonally adjusted series reported a loss because it didn’t rise as quickly as in normal years . The January 2021 dip wasn’t as pronounced as in prior years, so the seasonally adjusted series reported a small gain. In June and July 2021, employment fell, but not as fast as usual, so the seasonally adjusted series reported gains. Figure A Public education employment subject to large seasonal adjustments : Payroll employment for local government education, in thousands, seasonally and nonseasonally adjusted, September 2017–August 2021 Seasonally adjusted Nonseasonally adjusted Sep-2017 7949.1 7840.9 Oct-2017 7942.9 8194.9 Nov-2017 7946.6 8288.5 Dec-2017 7945.2 8251.8 Jan-2018 7919.7 8021.9 Feb-2018 7951.2 8256.1 Mar-2018 7949.8 8281.5 Apr-2018 7951.2 8258.7 May-2018 7955.7 8273.3 Jun-2018 7966.6 7913.8 Jul-2018 7971.5 6756.6 Aug-2018 7975.6 7084.2 Sep-2018 7968 7899.4 Oct-2018 7970.4 8224.1 Nov-2018 7965.1 8303 Dec-2018 7978.9 8283.5 Jan-2019 7989.8 8094 Feb-2019 7965.3 8267.3 Mar-2019 7981.2 8310 Apr-2019 7997.8 8308.7 May-2019 7989.4 8297.1 Jun-2019 7977.4 7933.6 Jul-2019 7997.3 6782.6 Aug-2019 8004.4 7117.1 Sep-2019 8016.2 7953.4 Oct-2019 8015.4 8270.8 Nov-2019 8020.1 8356.9 Dec-2019 8016.9 8319.1 Jan-2020 8024.5 8138.3 Feb-2020 8029.6 8307.5 Mar-2020 8009.3 8328.4 Apr-2020 7571.9 7892.9 May-2020 7280.4 7589.5 Jun-2020 7335.7 7283.7 Jul-2020 7492.3 6326.5 Aug-2020 7672 6717 Sep-2020 7443.5 7383.7 Oct-2020 7341.4 7610.6 Nov-2020 7334.8 7677.4 Dec-2020 7326.4 7634.1 Jan-2021 7394.7 7521 Feb-2021 7359.7 7648.5 Mar-2021 7389 7706.6 Apr-2021 7411.2 7733.6 May-2021 7457 7766 Jun-2021 7590.8 7525.6 Jul-2021 7815.7 6625.3 Aug-2021 7810 6848.3 Chart Data Download data The data below can be saved or copied directly into Excel. The data underlying the figure. Source: EPI analysis of Bureau of Labor Statistics' Current Employment Statistics public data series
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