Economy Adds 850,00 Jobs as Recovery Continues
July 2, 2021 – Employment rose by 850,000 in June as the U.S. unemployment rate now stands at 5.9 percent, according to the most recent U.S. Bureau of Labor Statistics report released this morning. Notable job gains occurred in leisure and hospitality, public and private education, professional and business services, retail trade, and other services. “It is promising to see the labor market steadily improving and the unemployment rate continuing to inch toward pre-pandemic levels” said Michael Smith, global CEO of Randstad Sourceright. “As the economy recovers, we are starting to see a more pronounced labor shortage across key industries. Salary expectations have changed as a result of the pandemic and employers will need to look closely at market intelligence and data around compensation in their industries to ensure they are offering salaries that are competitive in today’s labor market.”
“Those stronger payroll gains could be a sign that some of the factors holding back employment have started to ease, particularly the enhanced unemployment benefits which are expiring early in more than half of states,” Andrew Hunter, senior U.S. economist for Capital Economics, wrote in a note Friday morning. “But that is hard to square with the continued weakness of participation, with the labor force rising by only 151,000 in June and remaining more than three million below its February 2020 level.”
“There’s no doubt that some employers are having to do more to attract workers. And retention will also be a challenge for business in the coming months,” Mark Hamrick, senior economist analyst for Bankrate, wrote in an email Friday morning. “The longer-term key question is whether inflation will run hotter and remain more persistent beyond the current supply and labor squeezes. This part of the story will be closely watched, including by the Federal Reserve, here in the second half of the year.”
Where Job Growth Occurred
- In June, employment in leisure and hospitality increased by 343,000, as pandemic-related restrictions continued to ease in some parts of the country. Over half of the job gain was in food services and drinking places (+194,000). Employment also continued to increase in accommodation (+75,000) and in arts, entertainment, and recreation (+74,000). Employment in leisure and hospitality is down by 2.2 million, or 12.9 percent, from its level in February 2020.
- In June, employment rose by 155,000 in local government education, by 75,000 in state government education, and by 39,000 in private education. In both public and private education, staffing fluctuations due to the pandemic, in part reflecting the return to in-person learning and other school-related activities, have distorted the normal seasonal buildup and layoff patterns, likely contributing to the job gains in June. (Without the typical seasonal employment increases earlier, there were fewer layoffs at the end of the school year, resulting in job gains after seasonal adjustment.) These variations make it more challenging to discern the current employment trends in these industries. Since February 2020, employment is down by 414,000 in local government education, by 168,000 in state government education, and by 255,000 in private education.
- Employment in professional and business services rose by 72,000 in June but is down by 633,000 since February 2020. In June, employment rose in temporary help services (+33,000), advertising and related services (+8,000), scientific research and development services (+7,000), and legal services (+6,000).
- Retail trade added 67,000 jobs in June, but employment is down by 303,000, or 1.9 percent, since February 2020. Over the month, job growth in clothing and clothing accessories stores (+28,000), general merchandise stores (+25,000), miscellaneous store retailers (+13,000), and automobile dealers (+8,000) was partially offset by losses in food and beverage stores (-13,000) and health and personal care stores (-7,000).
- The other services industry added 56,000 jobs in June, with gains in personal and laundry services (+29,000), in membership associations and organizations (+18,000), and in repair and maintenance (+9,000). Employment in other services is 297,000 lower than in February 2020.
- Employment in social assistance rose by 32,000 in June, largely in child daycare services (+25,000). Employment in social assistance is down by 236,000 from its level in February 2020.
- In June, wholesale trade added 21,000 jobs, with gains in both the durable and nondurable goods components (+14,000 and +9,000, respectively). Employment in wholesale trade is 192,000 lower than in February 2020.
- Employment in mining rose by 10,000 in June, reflecting a gain in support activities for mining. Mining employment is down by 110,000 since a peak in January 2019.
- Employment in manufacturing changed little in June (+15,000). Within the industry, job gains in furniture and related products (+9,000), fabricated metal products (+6,000), and primary metals (+3,000) were partially offset by a loss in motor vehicles and parts (-12,000). Employment in manufacturing is down by 481,000 from its level in February 2020.
- Employment in transportation and warehousing was little changed in June (+11,000). Employment gains in warehousing and storage (+14,000), air transportation (+8,000), and truck transportation (+6,000) were partially offset by a loss in couriers and messengers (-24,000). Since February 2020, employment in transportation and warehousing is down by 94,000.
- Construction employment changed little in June (-7,000). Over-the-month job losses in nonresidential specialty trade contractors (-15,000) and heavy and civil engineering construction (-11,000) were partially offset by a gain in residential specialty trade contractors (+13,000).
- Employment in construction is 238,000 lower than in February 2020. In June, employment showed little change in other major industries, including information, financial activities, and healthcare.
Search Veteran Weighs In
Founded in 1974 by Bill McCormick, The McCormick Group provides executive search services to associations, corporate government affairs offices and law firms, among others. The firm offers clients a full range of human capital services, including recruitment, human resources strategic planning and consulting, compensation studies and surveys, management succession consulting and restructuring, and outplacement consulting.
Mr. McCormick specializes in recruiting high-level candidates and in serving as a trusted business advisor. With over 34 years of experience in the executive search consulting business, he is recognized as an expert at recruiting exceptional talent and in creating successful dialogues between potential employees and employers. Mr. McCormick has been involved in more than 5,000 searches for executives and technical candidates in nearly every market specialty.
Mr. McCormick recently sat down with Hunt Scanlon Media to discuss the pandemic, hiring, and how his firm has adjusted to working with clients and candidates during the post pandemic era. Following are excerpts from that discussion.
Bill, with vaccines being distributed and restrictions being lifted, do you think an economic recovery has begun?
Yes the recovery has definitely begun. It actually began as it started with the adjustments to the shutdown. Starting with the dramatic decrease in March of 2020 we have seen a very slow adjustment to the economy and increasing sales every quarter since Q2 if 2020. However, through Q1 of 2021 we are only 25 percent back to 2019 levels despite increasing sales each quarter. As we passed the 12th month in February we began to see an acceleration in sales through March and a significant pick up in assignments headed into April.
When do you think we can expect a full recovery?
The reopening of America will continue to accelerate and be in full stride by the return to school in September. After that it will be an accelerated return to full employment fueled by stimulus money. By then the trends of online technology buying, workplace disbursement, geographical migration and the marketing changes that address them will be understood and in place. The pandemic will be behind us and a new set of challenges will be in front of us. 2022 should be the base year for resumed operations.
“The pandemic will be behind us and a new set of challenges will be in front of us. 2022 should be the base year for resumed operations.”
How has your firm adjusted to working with clients during the pandemic? Do you think some of these changes will be here to stay?
People work from home. Searches are geographically wider. Everything is video based and internet based. Client visits and in person interviews are rare. Technology and strategic planning dominate the searches. The changes will fade some and the technology will improve. Most people will return to the offices in professional services. Searches will remain broader geographically. Searches will return to most functional areas with less emphasis on technology.
Related: Executive Search Firms Adapting to the New Normal
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
