All Jobs Businesses Cut in Pandemic Are Back, but Not Where They Were Lost

Sectors with a high concentration of white-collar office jobs, such as professional and technical services, technology-heavy information and finance, also had employment levels in June above February 2020 levels, helping drive the broader economic recovery. And industries that make, deliver and sell goods—including manufacturing, construction and retail—have fully recovered lost jobs.

Government employment, meanwhile, remains depressed as public schools, hospitals and transit systems slowly back up staff. The leisure and hospitality sector, which was hard hit by the onset of the pandemic, still has a lot of ground to make up.

“The pandemic has created big winners and big losers,” said

Julia Pollak,

chief economist at ZipRecruiter. “Many of these shifts now don’t seem to be cyclical shifts or just temporary pandemic shifts. They seem like they are permanent changes in the way Americans live, shop, learn, exercise, work.”

Here are the leaders and laggards in the U.S. pandemic jobs recovery and signs of where they are headed:

Transportation and Warehousing

A shift to e-commerce helped drive up employment in transportation and warehousing, a sector that was still pumping out jobs in June. Employers in the industry added about 36,000 workers last month. Warehouse employment was up by roughly 38% in June 2022, compared with February 2020. Couriers and messenger companies, which deliver packages to homes, also logged double-digit payroll growth over this period.

Some transportation roles, though, are lagging far behind. For instance, taxi, limousine and school-bus driver jobs are down by more than 18% from February 2020.

White-Collar Jobs

White-collar employers in the professional and business services sector had 880,000 more jobs on their payrolls in June 2022 than in February 2020. Accountants, management consultants and scientists logged among the strongest job growth over this period.

Labor shortages for office jobs have become acute. A Conference Board survey found that 84% of employers hiring professional and office workers found it difficult to find talent in March 2022, up from 60% in April 2021. Those worker shortages are driving up wages. Pay for professional and business service workers rose 5.8% in June from a year earlier, above the 5.1% average wage bump for private-sector workers.

Retail

Home-goods stores and big-box retailers, as well as e-commerce merchants, performed strongly once the pandemic hit and many Americans were stuck at home and seeking to buy goods, rather than services. By January of this year, retail employment had surpassed prepandemic levels.

But overall retail employment has declined since February as consumers are shifting again to spending money on travel and other in-person experiences.

Construction

Construction fully recovered to prepandemic employment levels this spring. The residential sector single-handedly drove the gains. Industrial and commercial construction roles grew much more slowly after sharp cutbacks in spring 2020.

Low mortgage rates in 2020 and 2021 helped spur home purchases, and many Americans, stuck at home, looked to spruce up their spaces. As a result, residential contractor jobs were up by 5.6% this June from February 2020. Still, the gains are tapering off: Residential contract employment didn’t budge from May to June, while residential construction jobs declined, likely reflecting the early stages of a housing-market slowdown. Residential construction jobs could face a deeper slump as the Fed increases interest rates to cool inflation.

Factories

Manufacturing employment is now slightly above prepandemic levels. Manufacturers of semiconductors, chemicals and electrical appliances have snapped up workers at a particularly rapid clip since the pandemic began. Auto plants are also back to February 2020 staffing levels.

Demand for factory workers is starting to ease, though: Manufacturing job postings fell in May, according to the Labor Department. That coincided with the Fed’s gauge of manufacturing output slipping.

Inflation is putting the brakes on consumer demand for manufactured products. At the same time, companies are starting to pull back on capital investment due to higher interest rates and a gloomier economic outlook, said Chris Williamson, chief business economist at S&P Global Market Intelligence, in a recent report. Some economists estimate that economic output contracted this spring for the second straight quarter.

Government

Government payrolls have largely flatlined this year and were down by about 660,000 in June from prepandemic levels, even though states are flush with cash from higher tax revenues and Covid-19-related federal aid.

Jobs at local public schools are 4% below where they were in February 2020, which partly could reflect teacher shortages as many quit from pandemic-related stresses.

Government agencies have been slower to increase wages, one reason the public sector is lagging behind the private sector in jobs growth, some economists say. Wages for state- and local-government jobs rose a seasonally adjusted 0.9% in the first quarter, compared with 1.3% for private-sector workers, Labor Department data show.

Restaurants, Bars and Hotels

Payrolls in the leisure and hospitality sector—which includes restaurants, bars and hotels—remain down by nearly 8% from February 2020 levels, after falling by nearly 50% in the first two months of the pandemic.

Pools, day camps and ice-cream shops are struggling to serve customers, or in some cases even open for the summer because there are too few workers.

The sector has added jobs each month since the start of 2021, including 67,000 in June. Many economists expect the leisure sector to help drive payrolls growth in the coming months, as it has more room to recover and could benefit from continued demand for travel and summer vacations.

—Anthony DeBarros contributed to this article.

Write to Sarah Chaney Cambon at sarah.chaney@wsj.com