Layoffs Remain Elevated as Pandemic Persists Across U.S.
August 6, 2020 – As COVID-19 cases continue to climb across the U.S., the Labor Department reported this morning that 1.2 million more Americans filed new claims for state unemployment benefits last week, the 20th week in a row that the figure has risen to well over one million. Economists surveyed by Dow Jones had been looking for 1.42 million. The level for the week represented a drop of 249,000 from the previous period. The latest numbers reflect the continued strain on the economy caused by a pandemic wreaking havoc around the world.
According to multiple reports, the continuing spike of job cuts is occurring against the backdrop of a spike in virus cases that has led many states to halt plans to reopen businesses and has caused millions of consumers to delay any return to traveling, shopping and other normal economic activity. Those trends have forced many businesses to cut jobs or at least delay hiring.
2020 Diversity, Equity & Inclusion Recruiting Report:
Building a Balanced and Diverse Workforce
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According to executive recruiters and many economists, the jobs crisis is upending young adults’ finances. The most particularly hard hit has been Millennials and Gen Z who report that the pandemic has all but derailed their financial independence.
Data out Wednesday from the ADP Research Institute showed hiring at U.S. companies remained positive in July, but the pace of job growth slowed sharply, with some industries, like financial activities, even seeing small declines. The monthly jobs report on Friday is expected to show a similar picture, with the median estimate calling for a 1.5 million monthly increase in payrolls after a 4.8 million surge in June.
Federal Reserve chairman Jerome Powell has repeatedly warned of a sluggish economic recovery if millions of workers cannot return to their previous jobs and need to retrain or learn new skills. “It looks like the data are pointing to a slowing in the pace of the recovery,” he said in a press conference on Wednesday, after the Fed’s monetary policy meeting.
“The possibility of mounting layoffs that could become permanent is high,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “Without effective virus containment the recovery remains at risk from ongoing job losses that could further restrain incomes and spending.”
Related: Companies Planning Big Comeback Post-Pandemic Crisis
During the week, 49 states reported 12,956,478 individuals claiming Pandemic Unemployment Assistance benefits and 48 states reported 1,144,429 individuals claiming Pandemic Emergency Unemployment Compensation benefits. The highest insured unemployment rates in the week were in Nevada (24.9), Puerto Rico (23.5), Hawaii (21.0), California (18.1), Louisiana (17.2), New York (16.3), Connecticut (15.2), Georgia (14.5), Massachusetts (14.3), and Michigan (13.8). The largest increases in initial claims for the week ending July 25 were in Virginia (+5,020), Nevada (+2,842), Missouri (+2,606), Indiana (+2,218), and New Jersey (+2,141), while the largest decreases were in California (-44,941), Georgia (-37,329), Florida (-17,514), Louisiana (-13,568), and Texas (-11,104).
Recruiters Share Their Views
“I agree with Minneapolis Federal Reserve president Neel Kashkari who said on CNBC he expects a long hard recovery,” said Bill Dubbs, president of Williams Executive Search. “Our clients are initiating searches on a basis of critical projects only. Interestingly though, it has never been easier to enter into a discussion with a potential candidate or source. Most are at home and happy to take a break from the computer screen.”
Unemployment Rate Falls to 11.1 Percent; Another 1.4 Million Jobless Claims Filed
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, and Succession Executive Search weigh in!
“First and second round meetings are happening via Zoom with only the finalist meeting the senior team,” Mr. Dubbs said. “We are also seeing a focus on local candidates as relocations are even more complex in today’s pandemic environment.”
“While these are challenging times, certain sectors remains vibrant and the demand for proven leadership remains essential in all sectors,” said William Rowe, chairman and CEO of Rowe Global. “We have been blessed to remain busy throughout this pandemic and while we serve clients across all industries and disciplines, the leading industry verticals during these last five months have been bioscience, technology, food manufacturing/productions, grocery, and professional services.”
“The on-going impact of turning off the strongest economy in American history will continue to be felt for months to come, however, we did not have something break this economy, we voluntarily shut it down for a health reasons and the underlying economic drivers remain in place, so we anticipate a steady recovery,” Mr. Rowe said. “We have already witnessed a steady increase in demand for new retained search assignments in May, June and July, which we believe will continue to be a trend.”
Related: 10 Tips for Networking with Executive Recruiters During COVID-19
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
