October 1, 2020 – The Labor Department reported this morning that 837,000 more Americans filed new claims for state unemployment benefits last week. Economists polled by Dow Jones expected first-time claims to come in at 850,000, down slightly from the 860,000 claims reported for the previous week. The latest figures portend an unstable and volatile job market.
The Labor Department changed its methodology from one that used seasonal adjustments to account for normal disruptions in the job market that don’t apply as much under current virus-related conditions.
Economists surveyed by The Wall Street Journal projected that today’s jobs report would show employers adding 800,000 jobs in September. While that would have been a strong gain compared with pre-pandemic figures, it would mark the first month since April that net hiring hasn’t exceeded one million. Employers through August have replaced about 11 million jobs of the 22 million shed in March and April at the beginning of the pandemic.
“Initial claims, which seem to be stabilizing at an elevated level, suggest the labor market recovery is plateauing,” Nomura economist Lewis Alexander said. “That said, recent declines in continuing claims suggest that rehiring activity continued to offset declines.”
However, a wave of new layoffs from major corporations looms. On Tuesday, Disney announced it would be cutting 28,000 jobs in its resort business. Shell on Wednesday said it planned to cut up to 9,000 positions by the end of 2022. And airlines including American Airlines and United Airlines Holdings are moving forward with a collective 32,000 job cuts.
During the week, 50 states reported 11,828,338 individuals claiming Pandemic Unemployment Assistance benefits and 50 states reported 1,828,370 individuals claiming Pandemic Emergency Unemployment Compensation benefits. The highest insured unemployment rates in the week were in Hawaii (21.3), California (16.1), Nevada (14.7), New York (13.7), Puerto Rico (12.8), Louisiana (12.6), Georgia (12.2), the Virgin Islands (11.9), District of Columbia (11.2), and Connecticut (10.6). The largest increases in initial claims for the week ending September 19 were in New York (+7,893), Georgia (+7,336), Massachusetts (+5,186), New Jersey (+5,038), and Oregon (+3,251), while the largest decreases were in Maryland (-2,197), Michigan (-2,169), Indiana (-1,543), Illinois (-1,408), and Louisiana (-1,340).
“As we turn the corner into fall and experience much of the energy, push, and eagerness that usually accompanies the month of September, there is one thing that is certain: people are uncertain,” said Heather Eddy, president and CEO of executive search and non-profit consulting firm KEES (Kistner Eddy Executive Services). “Leaders are uncertain about the next six to 12 months and the health of their organizations, teams, and the missions they fulfill. Words such as hesitancy, tentative, change, and transition keep coming up in conversation. People are looking for a silver bullet and not seeing it, or anything that looks like it.”
Another Million File for Unemployment Benefits
After coming in under the one million mark for one brief week, new jobless claims registered over a million for the second straight week as COVID-19 continues to impact the U.S. economy. Let’s take a look inside the numbers as Keith Macomber of Capitus Associates weighs in!
Employers in the U.S report improved hiring plans for the fourth quarter following the 10 year low reported in Q3, according to the latest “Employment Outlook Survey” released on Tuesday by ManpowerGroup. Overall hiring intentions improved in 37 of 43 countries since last quarter, though 41 declined year-over-year.
“Though we still have a long way to go to recover from what started as a health crisis and has evolved to a social and economic crisis, it is encouraging to see optimistic outlooks in some of the industries most heavily impacted including leisure, retail and manufacturing,” said Becky Frankiewicz, president of ManpowerGroup North America. “We also see employers recognize this recovery will take longer than they initially thought and many are adapting work models for the long term.”
“This is accelerating a shift closer to what we know workers have wanted for some time: autonomy to choose how and where they get their work done, more learning on demand, and a focus on achieving a better blend of work and home,” Ms. Frankiewicz said. “Now is the time for employers to offer targeted skills development and more flexible future-focused work options for those working remote and in the workplace.”
Whether employees get what they want, however, is fast becoming a secondary concern for most companies. The shift from growth and expansion just six months ago to one of pure survival is now the primary focus of every business, with few exceptions.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media