October 2, 2020 – Employment rose by 661,000 in September as the U.S. unemployment rate fell to 7.9 percent, according to the most recent U.S. Bureau of Labor Statistics report released this morning. That’s down from a peak of 14.7 percent in April, but still far above the 3.5 percent rate in February before the coronavirus pandemic led to mass economic shutdowns across the country.
Economists and officials have also now focused more closely on the Labor Department’s data on “permanent job losers,” or those who do not expect to be called back from temporary layoffs, as a warning sign of the longer-term impacts of the pandemic on the labor market. In September, the number of permanent job losers increased by 345,000 to 3.8 million.
“The labor market still has a long way to go to return to pre-pandemic levels and an uneven economic recovery means there are still many Americans out of work,” said Karen Fichuk, CEO, Randstad North America and Randstad N.V. executive board member. “However, this month we are seeing signs of hope such as the strong growth in roles linked to the e-commerce industry, as online shopping surpasses pre-pandemic levels. We need to ensure we are connecting out of work Americans with in-demand sectors such as customer service, manufacturing and logistics, to help spur our economic recovery.”
Where Job Growth Occurred
- Employment in leisure and hospitality increased by 318,000 in September, with almost two-thirds of the gain occurring in food services and drinking places (+200,000). Despite job growth totaling 3.8 million over the last 5 months, employment in food services and drinking places is down by 2.3 million since February. Amusements, gambling, and recreation (+69,000) and accommodation (+51,000) also added jobs in September.
- Retail trade added 142,000 jobs over the month, with gains widespread in the industry. Clothing and clothing accessories stores (+40,000) accounted for about one-fourth of the over-the-month change in retail trade. Notable employment increases also occurred in general merchandise stores (+20,000), motor vehicle and parts dealers (+16,000), and health and personal care stores (+16,000). Employment in retail trade is 483,000 lower than in February.
- Employment in healthcare and social assistance rose by 108,000 in September but is down by 1.0 million since February. Healthcare added 53,000 jobs in September, with continued growth in offices of physicians (+18,000), home healthcare services (+16,000), and offices of other health practitioners (+14,000). Social assistance added 55,000 jobs, mostly in individual and family services (+32,000) and in child day care services (+18,000).
- Professional and business services added 89,000 jobs in September. Employment increased in services to buildings and dwellings (+22,000), architectural and engineering services (+13,000), and computer systems design and related services (+12,000). Despite gains of 910,000 since April, employment in professional and business services is 1.4 million lower than in February. Employment in transportation and warehousing rose by 74,000 in September. Within the industry, job gains continued in warehousing and storage (+32,000), transit and ground passenger transportation (+21,000), and couriers and messengers (+10,000). Although the industry has added 291,000 jobs since May, employment in transportation and warehousing is 304,000 lower than in February.
- Manufacturing added 66,000 jobs over the month. Durable goods accounted for about two-thirds of the gain, led by motor vehicles and parts (+14,000) and machinery (+14,000). Despite gains over the past five months, employment in manufacturing is 647,000 below February’s level.
- Financial activities added 37,000 jobs in September. Job growth occurred in real estate and rental and leasing (+20,000) and in finance and insurance (+16,000). Employment in financial activities is 162,000 below the level in February.
- In September, the other services industry added 36,000 jobs, largely in membership associations and organizations (+31,000). Employment in other services is 495,000 lower than in February.
- Employment in information grew by 27,000 in September but is down by 276,000 since February. Motion picture and sound recording industries accounted for most of the September gain (+23,000).
- Construction employment increased by 26,000 in September, with growth in residential specialty trade contractors (+16,000) and construction of buildings (+12,000). Construction employment is below its February level by 394,000. In September, wholesale trade added 19,000 jobs, with gains in both the durable and nondurable goods components (+13,000 and +8,000, respectively). Employment in wholesale trade is 312,000 lower than in February.
- Government employment declined by 216,000 in September. Employment in local government education and state government education fell by 231,000 and 49,000, respectively. A decrease of 34,000 in federal government was driven by a decline in the number of temporary Census 2020 workers. Partially offsetting these declines, employment in local government, excluding education, rose by 96,000.
- Employment in private education decreased by 69,000 in September, after a gain of similar magnitude in August. Employment in the industry is down by 355,000 since February.
- Employment changed little in mining in September (+1,000). Employment in the industry is down by 133,000 since a recent peak in January 2019; about three-fourths of this decline has occurred since February of this year.
Top Search Consultants
“Alta Associates’ search specialty is cybersecurity. The pandemic has caused companies to increase their remote workforce and speed up their digital transformation efforts, resulting in expanded attack surfaces of their companies,” said CEO Joyce Brocaglia. “This has created a greater demand for cybersecurity and risk executives. So regardless of the overall unemployment trend, we have seen a surge in companies retaining us to fill key leadership roles in cybersecurity, IT risk, and privacy departments.”
Business Agility Critical to Post-Pandemic Workforce, Economic Recovery
Human capital leaders are playing a critical role in their companies’ survival and growth during this time of crisis, according to the latest Talent Trends report by Randstad Sourceright. These days, HR and procurement leaders are meeting needs like safely operating in a pandemic, preparing their business for new waves or a sudden spike of the virus, and more.
“We are fortunate to recruit in the medical device industry and the last two quarters have been particularly strong for our segment, which includes infection prevention, PPE, diagnostic and medtech companies,” said Paula Rutledge, president of Legacy MedSearch. “The World Economic Forum estimated 28 million elective surgeries may have be postponed or cancelled globally in 2020 and the backlog could take 45 weeks to clear. This means that many companies are hiring to mirror the hospital caseloads as well as to shore up supply chain and distribution. While most of our clients continued doing both critical and opportunistic hiring in Q2 and Q3, we are seeing signs of net-higher headcounts in the next few quarters as the ‘new normal’ is settling in.”
A View From Overseas
“Key economic indicators suggests that the global economy has entered into recovery mode – e.g. stock markets have largely recovered their COVID-19 triggered decline,” said Henrik Brabrand, CEO of Albright Partners A/S in Denmark. “However, the ongoing recovery can only be sustained if the panic that the pandemic has caused is resolved or at least durably mitigated. In nearly every region of the world, a more optimistic than pessimistic outlook on economies has emerged and for the first time in 2020 executives at large expect their companies’ profits to increase rather than decrease in the months ahead,” he said.
“We have learned a lot from the first pandemic wave in the spring that has since been put to great use in this second post-summer pandemic wave, and these continuous learning loops will allow us in the future to develop more sustainable strategies triggering a reduction in the negative economic impacts of the COVID-19 pandemic.”
Like most businesses, executive search took a huge hit at the start of COVID-19, Mr. Brabrand said. “This continued throughout Q2 2020. Executive candidates were reluctant to change careers and possibly relocating their family and clients were hesitant to fill roles with strictly virtual interviews. However, niche operating firms with key focus in industries less impacted by the pandemic – such as life sciences & healthcare, high tech and insurance, to name a few – have, in fact, continued their growth journey during the pandemic.” Firms like Albright Partners, which is based in Copenhagen and operates within life sciences & healthcare, have experienced double digit growth.
“Like many other industries, the pandemic has changed the way in which executive recruiters conduct their business,” said Mr. Brabrand. “Executive search firms are now more than ever employing a vast array of digital tools and platforms and are, in essence, putting us on the path to becoming digital enterprises.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media