July 9, 2020 – As COVID-19 cases continue to climb across the U.S., the Labor Department reported this morning that 1.3 million more Americans filed new claims for state unemployment benefits last week, the 15th week in a row that the figure has topped one million. Economists surveyed by Bloomberg had been expecting 1.38 million claims. The latest numbers reflect the continued strain on the economy caused by a pandemic wreaking havoc around the world. Almost 48 million people have now filed for unemployment benefits over the past 15 weeks, representing the biggest jobs loss in U.S. history.
“While initial jobless claims remain historically high, at more than 1 million per week, this is a gross rather than net number. The actual number of people collecting unemployment continues to steadily decline, as shown by the move down in continuing claims,” Wells Fargo said in a note.
“Continuing claims increased in Texas, Florida, and California, which are all experiencing a resurgence of the virus and have begun to roll back reopening measures,” Deutsche Bank said in a note. “In turn, we expect this week’s initial jobless claims to remain roughly steady and will closely monitor continuing claims, particularly in the aforementioned states that have rolled back reopening measures. As we highlighted recently, continued spread of the virus remains a significant downside risk to the outlook as about 30-50 percent of GDP comes from counties that have seen worsening COVID trends.”
During the week, 47 states reported 14,363,143 individuals claiming Pandemic Unemployment Assistance benefits and 41 states reported 850,461 individuals claiming Pandemic Emergency Unemployment Compensation benefits. The highest insured unemployment rates in the week were in Puerto Rico (25.4), Nevada (20.8), Hawaii (20.7), the Virgin Islands (17.5), New York (17.1), California (16.7), Louisiana (16.2), Massachusetts (15.6), Georgia (15.1), and Connecticut (15.0). The largest increases in initial claims for the week were in Michigan (+18,668), Indiana (+15,496), Texas (+7,046), Virginia (+6,662), and Kentucky (+5,794), while the largest decreases were in Oklahoma (-40,208), Florida (-11,313), Maryland (-9,926), Georgia (-8,240), and California (-7,132).
Employment surprisingly rose by 4.8 million last month as the U.S. unemployment rate fell to 11.1 percent, according to the most recent U.S. Bureau of Labor Statistics report. These improvements in the labor market reflect a limited resumption of economic activity that had been curtailed in March, April and May due to the COVID-19 pandemic and efforts to contain it. “Data on jobless claims remains noisy at this point due to processing lags, but the fact that cumulative jobless claims over recent weeks are implying a considerably higher level of continuing claims, compared with reported continuing claims data that has been broadly flat over the past four weeks, suggests a high level of churn in the labor market continued through June,” Morgan Stanley wrote in a note.
What Talent Experts Are Saying
“Those who have cash and a balance sheet don’t have to cut the team back,” said Clark Beecher, managing partner of Houston-based executive search firm Beecher Reagan. “They will be well positioned for the hockey stick to come. Most ground is made up in the first five percent or the next run. Unfortunately, there will be winners and losers in our industry like before,” he said
“While it is encouraging to see 4.8 million Americans return to work in June across so many sectors, businesses must be mindful that COVID-19 cases continue to increase across the country and the job market remains very fluid,” said Rebecca Henderson, CEO of Randstad Global Businesses and executive board member. “The two most important things businesses can do right now are to remain vigilant when adhering to new local guidelines regarding how and when to safely reopen and to take stock of the skills that are most important to their business operations. It is crucial that leaders ensure they have the talent in place to carry out those core, essential functions and prioritize building an agile workforce to adapt to changing business demands.”
As parts of the U.S. continue to reopen and COVID-19 cases continue to surge, mixed numbers on the economy are released today showing some improvements but still a ways to go for a recovery. Search experts from Wilton & Bain, The Bowerman Group, Horton International, and Succession Executive Search weigh in!
“Our clients seemed to go immediately in one of two directions when COVID hit: Self-preservation or opportunism,” said Andrew Thompson, founder and managing partner of Notch Partners, which connects private equity firms with backable C-level executives. If their portfolio companies were heavily impacted, they went into cost reduction and cash management mode. Suddenly the important skill sets were more defensive than growth oriented.”
“Now that the dust has settled from the initial COVID shock, most PE investors are declaring emphatically that they are open for business,” said Mr. Thompson. “They are seeking to partner with CEOs who understand how to tactically manage through a crisis while maintaining the clarity of vision to see opportunities where others are just ducking for cover. Expertise in hard-hit industries, such as travel, and growth industries, such as last-mile logistics, are at a premium.”
“The majority of our clients are venture and PE-backed firms,” said Joshua R. Hollander, president and CEO of Horton International. “For those with strong balance sheets or even managed to close new rounds of capital during COVID, there is an excellent opportunity to top-grade talent in critical areas due to the uncertainty faced by their competitors in less favorable financial positions. For our more traditional clients, we see an intense focus on adding talent with digital transformation skills, as many corporations are rapidly accelerating digitization strategies due to today’s new requirements for engaging with internal and external stakeholders.”
He said his firm has been having “interesting conversations” with CEOs regarding corporate resiliency now that organizations have settled into new remote work models. “While many companies have seen productivity gains, it is unclear whether the new work-life balance is sustainable and steps are needed to ensure employee and overall corporate wellbeing. There are implications for succession planning, organizational design, and even diversity and inclusion programs.”
One of the assessment tools Horton has added to its suite of services is a remote work scorecard that benchmarks individuals and teams against the psychometrics that define high performing remote workers. “It is a valuable tool for helping leaders, managers, and employees better understand the new opportunities and challenges they face and better set themselves and their teams up for success,” said Mr. Hollander.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Erik Boender, Senior Research Editor – Hunt Scanlon Media