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ANALYSIS: July Jobs Report Shows Workers Left Legal Occupations

Aug. 7, 2020, 6:44 PM

The Bureau of Labor Statistics released July employment figures that show a decline in the jobless rate for legal occupations. But this improvement also came with a loss in legal occupations employment. The combination means that workers in July left the labor force, creating an artificially rosy view of unemployment in the legal sector.

In July, the unemployment rate fell in legal occupations and in the U.S. as a whole. Without accounting for seasonal adjustments, total U.S. unemployment dropped from 11.2% in June to 10.5% in July, while legal occupations unemployment fell 1.3 percentage points to 2.8%. That’s a good thing.

Unemployment rates by gender in the legal industry continued to show that women and men are having similar experiences, with 2.8% of women unemployed compared to 2.9% of men—both down from June. That’s also good.

But when we look at the total employment counts (also not seasonally adjusted), legal occupations lost more than 70,000 jobs from June (1.92 million) to July (1.85 million).

These results may appear to be at odds with findings that the legal services industry posted a small (seasonally adjusted) gain in jobs in July. But it is important to remember that there are two different employment data series reported by BLS: one that tracks employers (“establishment data”), and one that tracks individuals (“household data”). “Legal services” is an industry-specific category in the establishment data series, while “legal occupations” is an occupational category used in the household data series. So the dual existence of an increase in legal-industry employment totals and decrease in legal-occupation employment totals is not a paradox.

For more information on lawyer employment, see my July 31 analysis. And for a look at historical unemployment in legal occupations and how economic downturns have affected it in the past, refer back to my April 3 analysis.

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