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Reproduced from the Leuthold Group; Note: Subdivides the total U.S. unemployment rate between four sectors with the lowest average hourly earnings and the remaining nine sectors; Chart: Axios Visuals

Job recovery is arriving much faster for workers in America’s highest earning industries.

Why it matters: The bottom earning industries are nowhere near recovered — right as the economy faces another test from the pandemic.

  • Meanwhile, high earning industries have an unemployment rate that’s approaching normal.

Flashback: The unemployment rate in the highest and lowest earning industries was within a tight range, 3% and 3.5%, respectively, according to investment research firm the Leuthold Group. (Bottom earning sectors have historically seen slightly higher rates of unemployment.)

  • Then the gap exploded when COVID-19 forced the initial wave of widespread lockdowns in the spring.
  • High earning sectors’ unemployment rate rose to 12%. But it was nearly twice as bad for the lowest earning industries, with unemployment peaking at 23%.

Details: Industries like retail, leisure and hospitality, agriculture and nondurable goods are the bottom earning industries.

  • Top earning industries include finance, durable goods, and professional and business services.

Between the lines: The unemployment rate among the low earning sectors remains 6 percentage points above its pre-pandemic level.

  • Recovery is in reach for the high earning industries, with unemployment just 2.5 percentage points higher than pre-crisis levels.

Where it stands: More than half of currently unemployed Americans worked in the bottom earning industries, even though they represent only 24% of the workforce.

What they're saying: With soaring COVID-19 cases leading to restrictions across most of the country, analysts expect the lowest income industries to once again take a bigger hit to employment.

  • "Similar to the summer’s second wave, high-earner, mostly anti-social industries (three-quarters of employment and a higher proportion of total income and spending) will likely again prove largely impervious,” Jim Paulsen, chief investment strategist at the Leuthold Group, wrote in a research note on Wednesday.
  • This could explain why the U.S. might not see as big an economic drag as the coronavirus rages across the country.
  • Top earning workers “quickly and decisively entered a new [economic] expansion — even though 55% of the unemployed still struggle with extremely challenging conditions,” says Paulsen.

Go deeper

Dion Rabouin, author of Markets
Dec 15, 2020 - Economy & Business

The inequality is getting harder to ignore

Illustration: Sarah Grillo/Axios

As the frenzy in IPOs and the overall stock market continues, data show overall consumer confidence is languishing and concern about income inequality is rising.

Driving the news: A new survey from research and data firm CivicScience provided exclusively to Axios shows 78% of Americans are at least somewhat concerned about the rising level of inequality in the U.S. and 48% are very concerned.

Former D.C. Guard alleges Army Generals lied about Jan. 6 response

Members of the National Guard and Capitol police keep a small group of pro-Trump demonstrators away from the Capitol following the insurrection on Jan. 6. Photo: Spencer Platt/Getty Images

A former D.C. National Guard official has alleged that top Army generals "lied" to Congress in their testimony on the U.S. Capitol riot, Politico first reported Monday.

The big picture: Col. Earl Matthews, who was serving on Jan. 6, alleges in a memo that the official version on the military response is "worthy of the best Stalinist or North Korea propagandist" and that the Pentagon inspector general's November report on it features "myriad inaccuracies, false or misleading statements, or examples of faulty analysis."

Toyota to build $1.3 billion U.S. battery plant in North Carolina

The all-electric Toyota bZ4X, the company's first battery-electric vehicle, at the Los Angeles Auto Show in Los Angeles, California on Nov. 17. Photo: Frederic J. Brown/AFP via Getty Images

Toyota announced Monday it's investing $1.3 billion to construct an electric vehicle battery "megasite" near Greensboro, North Carolina, set to open in 2025.

Why it matters: Toyota's Prius hybrid won environmental plaudits when it launched in 1997, but it has since lost ground to electric vehicle world leader Tesla, per Axios' Joann Muller. This battery plant will be the first to produce automotive batteries for Toyota in North America.

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