Observing Recent Trends in Hours Worked by Hourly Employees
Introduction
As states ease restrictions established during the COVID-19 pandemic, questions remain about the rate at which businesses are reopening and people are returning to work. According to the most recent employment report from the U.S. Bureau of Labor Statistics, payroll employment showed some preliminary signs of recovery in May after significant declines through March and April. In the Fifth District, which includes the Carolinas, Maryland, Virginia, most of West Virginia and the District of Columbia, payroll employment increased by 188,500 in May after plunging by 1.9 million in March and April combined. Leisure and hospitality jobs, which were hit particularly hard with 818,900 lost in the Fifth District in March and April, increased by 112,100 in May.
The monthly employment reports provide detailed information about the state of the labor market, but they are only available with a lag. Regional employment data at the state level are released approximately three weeks after the reference month. This article discusses a higher frequency indicator of daily hours worked by hourly employees, provided by the company Homebase, to gain additional insights into how labor demand is evolving for some of the most severely impacted industries such as leisure and hospitality.
Homebase is a payroll company that provides scheduling, timekeeping, and communication to more than 100,000 local, mostly individually owned and operated businesses across the United States. Homebase’s national dataset includes hours worked at approximately 60,000 businesses, primarily in the restaurant, food and beverage, and retail sectors, which employ approximately one million hourly employees. Homebase data were previously discussed in an April article titled How COVID-19 is Affecting Main Street by Richmond Fed economists Marios Karabarbounis and Nicholas Trachter. This post complements that analysis by presenting changes in hours worked by hourly employees for three hard hit industries — food and drink, leisure and entertainment, and retail — and for each jurisdiction in the Fifth District. Data are reported as the percent change in hours worked by hourly employees relative to the median for that day of the week for the period January 4 to January 31. All figures show seven-day moving averages to smooth volatility in the data series.
Industry Breakdowns
The number of hours worked by employees in the food and drink industry approached its lowest level in the data series around mid-April. Compared to the base period, there were approximately 65 percent fewer hours worked at local food and drink businesses in the United States. Declines in Fifth District jurisdictions ranged from about 60 percent in South Carolina to about 75 percent in the District of Columbia. By early May, hours worked were trending upward for all jurisdictions except for the District of Columbia. The increases have been very gradual for Maryland, North Carolina, and Virginia, but steeper for South Carolina and West Virginia. As of June 24, hours worked at food and drink businesses remain below their base period level, but Maryland, North Carolina, South Carolina, and West Virginia are closer to returning to their base period level than the United States overall.
The leisure and entertainment industry showed even larger declines in hours worked than the food and drink industry. Hours worked in the United States were down about 80 percent from January to mid-April. In the Fifth District, the largest decrease occurred in South Carolina and the smallest in Maryland at around 90 percent and 70 percent, respectively. As previously mentioned, hours worked by hourly employees at food and drink businesses started to gradually trend upward for most jurisdictions in early May. In comparison, hours worked at leisure and entertainment businesses for most jurisdictions did not begin trending upward until mid to late May. One potential explanation is that many states eased restrictions on food and drink establishments before entering phases where leisure and entertainment establishments were allowed to operate. Data from mid to late June indicate that in South Carolina, the number of hours worked by hourly employees at leisure and entertainment businesses, exceeded the number of hours worked in the base period. The number of hours worked in the other Fifth District jurisdictions remain well below their base period levels.
Turning to retail businesses, the number of hours worked by hourly employees fell by about 55 percent in the United States from January to mid-April. By comparison, South Carolina, Virginia, and West Virginia experienced notably smaller declines in hours worked, while the District of Columbia experienced a notably larger decline. In terms of recovery, the number of hours worked at retail businesses in North Carolina, South Carolina, and West Virginia have neared or are exceeding pre-pandemic levels. Maryland and Virginia have been slower to recover but have been generally trending upward in June. The District of Columbia remains far below its pre-COVID-19 level of hours worked at retail businesses.
Conclusion
Overall, Homebase data suggest that the number of hours worked by hourly employees in the food and drink, leisure and hospitality, and retail industries has been rebounding nationally and in most Fifth District jurisdictions. The data series for some states are approaching their pre-COVID-19 level of hours worked. As states continue to enter different phases of their respective reopening plans, monitoring high frequency data like these can provide insights into the evolution of economic conditions during the pandemic.
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Views expressed are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.
