fbpx
Tuesday, 07 July 2020 21:52

4.8M Americans Back to Work in June---What It Means for Dealers

Written by Jason Unrau, CBT Automotive Network

Index

The Employment Situation report released by the Bureau of Labor Statistics from July 2 spells out a significant increase in employment for June.

The news release states the “total nonfarm payroll employment rose by 4.8 million in June” as the U.S. continues its COVID-19 pandemic recovery.

 

The correlating unemployment rate also dropped to 11.1%, a decline of 2.2% in a single month. It exceeds May’s return to work numbers of 2.7 million going back into the workforce.

 

Nationally, the unemployment rate spiked in April at 14.7%, up 10.3% from March, representing the largest jump on record as 23.1 million people were out of work. In just two months, it shows a moderate trend of returning to normal within four to six months.

 

Data is collected for the Employment Situation report by sector as well. The largest gains were in leisure and hospitality, which accounted for nearly two in five people re-entering the workforce. That’s followed by another 740,000 people who gained jobs in the retail trade.

 

Of the retail jobs in June, 84,000 in the retail trade are employed at “motor vehicle and parts dealers” as detailed in the report. In June 2019, just over 1.3 million people were on staff at automobile dealers. At the height of the pandemic response in April, it was down to just over a million. June put it back to 1,169,500, more than 89% of the pre-pandemic employment numbers at dealerships.

 

Nationwide, dealers are almost back to full staff and able to assist the surge in customers visiting their stores as well as the clients more comfortable using remote sales and services.

 

If your dealership hasn’t returned to nearly normal staffing, it may be that you’re in a hotspot or an area disproportionately affected economically. Otherwise, you may want to analyze what’s holding you back. 

 

The drop in unemployment is good news for the auto retail industry, meaning customers are once again leaving their homes and driving to their workplace. Car use is increasing and service business will also jump as a consequence. Steady employment is bringing customers back online for their car purchases.

 

Reconnecting with clients who are going back to work should be a priority for dealerships, reminding them the service and sales departments are available for their needs. While spending may be suppressed for the next few months, both the service department and the sales floor should be trending towards their pre-pandemic targets for the second half of 2020.


The economic recovery from COVID-19 will be tempered by flare-ups and hotspots it appears. Sudden joblessness has impacted millions of Americans who may have defaulted on loans or uncharacteristically missed payments on credit. This will certainly drive demand for special financing as lenders view car loans as higher risk.

 

Strengthen your dealership’s partnership with special financing lenders to ensure your customers have access to borrow the money needed for their car purchase. If you don’t already have it in place, establish financing options for service work also to help alleviate cashflow issues for your customers who need critical maintenance and repairs completed.

 

The job report for June is positive. Barring a serious resurgence in the nation, it appears we can expect future months to trend the same as America goes back to work. Ensure your dealership is prepared to handle the financial implications tied to COVID unemployment.

 

We thank CBT Automotive Network for reprint permission. 

Read 557 times