New data from the Bureau of Labor Statistics shows that franchised dealerships added 80,200 jobs in May, an extremely encouraging sign for employment in U.S. automotive retail.
 
At the end of February 2020 — prior to the coronavirus pandemic that forced many states to close — franchised dealerships directly employed more than 1.1 million people across the U.S. Unfortunately, like most industries, the auto retail industry was not immune to negative economic impacts caused by the coronavirus, and dealerships across the country were forced to reduce their workforces in light of the pandemic that shut down most of the country for nearly two months.
 
The U.S. Bureau of Labor Statistics in June published its first estimate of franchised dealership employment in April, showing that employment at franchised dealerships fell by 247,800 jobs to 888,200, or a decline of 21.8%. The Bureau on July 1 published its first estimate of dealership employment in May, which indicated signs of recovery in dealership employment and showed that employment increased by roughly 80,200, an increase of 9.0% compared to April.
 
America’s franchised new-car dealerships, most of which are small businesses as defined by the Small Business Administration, are a major contributor to the U.S. economy. In addition to the 1.1 million direct jobs, franchised dealerships are responsible for an additional 1.2 million indirect and induced jobs under normal times. On average, each dealer in the United States employs about 68 people with an average annual salary of over $70,000 — culminating in a $68.8 billion payroll nationally. Dealership payroll not only is vital to the American economy but also to dealer employees, their families and the local communities where dealerships operate.
 
While the May news from the Bureau was extremely positive, reaching pre-coronavirus employment levels and full economic recovery will be a slow process. As dealerships begin to reopen their doors, auto sales are increasing, and that will allow dealers to bring back even more of their employees and move towards full recovery.