Pace of recovery slows considerably
ThinkWhy, a SaaS company helping businesses navigate the labor market, released the national jobs report following the announcement from the Bureau of Labor Statistics that the economy added 661K jobs in September with the unemployment rate at 7.9 percent.
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“The supply of talent is already getting tight in certain locations for in-demand roles. The number of people employed in technology, finance and federal government roles has already surpassed last year’s level in many cities, putting a strain on qualified candidates for those positions, even though millions remain unemployed”
Approximately 22.2 million jobs were lost in March and April combined, but the 661,000 jobs added in September brings the total jobs recovered, over the last five months, back to the halfway point at 11.4 million. Still, the recovery has been very uneven across cities and industries. While some businesses are thriving, many others are struggling to stay afloat. The unemployment rate barely shifted, with tens of millions still unemployed. Economic stimulus is critical, but challenges will persist until COVID-19 is under control.
“The supply of talent is already getting tight in certain locations for in-demand roles. The number of people employed in technology, finance and federal government roles has already surpassed last year’s level in many cities, putting a strain on qualified candidates for those positions, even though millions remain unemployed,” said Jay Denton, SVP, Business Intelligence and Chief Innovation Officer at LaborIQ by ThinkWhy.
It’s unlikely that a major surge in economic activity will occur in the fourth quarter.
Labor Market Performance:
- Unemployment sits at 7.9%
- Temporary layoff level is 4.64 million
- September’s job gains concentrated in industries such as Leisure and Hospitality (318,000) and Trade, Transportation and Utilities (237,000)
- In addition, total nonfarm payroll average hourly earnings increased by 4.7% year-over-year ending in September 2020
Why It Matters: Key Business Impact
While we see economic activity toward recovery, LaborIQ® by ThinkWhy projects bumpy months ahead while the country awaits a vaccine, and we see how the cold months impact viral outbreaks. Until then, look for certain industries and occupations to rebound more quickly than others.
Watch for additional fiscal stimulus still being debated, as this will drive consumer confidence and spending. Recruitment for the following types of businesses will likely remain more robust than others through the fall:
- Retail (some seasonal)
- Finance and insurance
- Home delivery services
- Grocery stores
- Computer equipment
- Utilities
- Federal government
- Housing construction
- Scientific research and development
As businesses and talent acquisition professionals plan for recovery and growth, LaborIQ by ThinkWhy advises to:
- Keep a pulse on labor market performance, where hiring is increasing, and projected recoveries. These markets are where business growth and expansion opportunities exist.
- Expand talent searches to different parts of the country to find more diverse candidates.
- Stay current on market salary demands. Wage growth has remained strong during the pandemic, especially for many skilled labor occupations.
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INDUSTRY RECOVERY TRACKER
LaborIQ® forecasts the labor market to be back to pre-pandemic level by mid-to-late 2023. Several industries are poised to recover faster, while a few others could lag the 2023 timeframe by up to two years.
Recovery Timelines
2022:
Construction – Starts for single-family housing were up 4.1% in August from a month prior, and homebuilder sentiment jumped as the NAHB survey index increased 5 points to 83 in September.
Financial Activities – This industry is growing in many cities, including Austin, Fort Worth, Dallas, Sacramento, Charlotte and Las Vegas.
Government – State and local governments are the concern for this group as the pandemic’s effects could impact them for years.
Healthcare – As elective and preventive procedures return to normal scheduling, healthcare will remain one of the most in-demand sectors due to an aging baby boomer population.
Professional and Business – Projected to be the strongest-performing sector by the end of 2022.
Trade, Transportation and Utilities – Airlines recently announced significant layoffs, which could negatively impact the timing of this sector’s recovery. In September, TSA traveler throughput was down approximately 67% on average from the year before. While some retail has fared well, the decision for the next round of stimulus will impact the sector’s trajectory into the holiday season.
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