Unemployment Rate Falls to 6.3 Percent

With COVID-19 vaccines continuing to be distributed, the unemployment rate dropped slightly last month. Let’s take a look inside the latest unemployment numbers released by the Department of Labor this morning as Mike J.R. Wheless from Anthem Executive weighs in.

February 5, 2021 – Employment rose by 49,000 in January as the U.S. unemployment rate dropped to 6.3 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.

Total nonfarm payroll employment changed little in January (+49,000) but is below its February 2020 level by 9.9 million, or 6.5 percent. In January, notable job gains in professional and business services and in both public and private education were offset by losses in leisure and hospitality, in retail trade, in health care, and in transportation and warehousing.

Where Job Growth Occurred

  • In January, employment in professional and business services rose by 97,000, with temporary help services accounting for most of the gain (+81,000). Job growth also occurred in management and technical consulting services (+16,000), computer systems design and related services (+11,000), and scientific research and development services (+10,000). These gains were partially offset by job losses in services to buildings and dwellings (-14,000) and in advertising and related services (-6,000). Since February, employment in professional and business services is down by 825,000.
  • In January, employment increased in local government education (+49,000), state government education (+36,000), and private education (+34,000). In both public and private education, pandemic-related employment declines in 2020 distorted the normal seasonal buildup and layoff patterns. This likely contributed to the job gains in January (after seasonal adjustment).
  • Wholesale trade continued to add jobs in January (+14,000). However, employment in the industry is 263,000 below its February level.
  • In January, employment in mining increased by 9,000, with a gain of 8,000 in support activities for mining. Mining employment is down by 133,000 since a recent peak in January 2019, though employment in the industry showed little change for several months prior to the uptick in January.
  • In January, employment in leisure and hospitality declined by 61,000, following a steep decline in December (-536,000). In January, employment edged down in amusements, gambling, and recreation (-27,000) and in accommodation (-18,000). Employment in food services and drinking places continued to trend down (-19,000). Employment in leisure and hospitality fell by 8.2 million during March and April, increased by 4.9 million from May to November, and then declined by 597,000 over the past two months. Since February, employment in leisure and hospitality is down by 3.9 million, or 22.9 percent.
  • Retail trade lost 38,000 jobs in January, after adding 135,000 jobs in December. Over the month, employment declined in general merchandise stores (-38,000), electronics and appliance stores (-29,000), and non-store retailers (-15,000). These job losses were partially offset by gains in food and beverage stores (+15,000), clothing and clothing accessories stores (+15,000), and health and personal care stores (+14,000). Employment in retail trade is 383,000 lower than in February.
  • Employment in healthcare declined by 30,000 in January. Within the industry, job losses occurred in nursing care facilities (-19,000), home healthcare services (-13,000), and community care facilities for the elderly (-7,000). Since February, healthcare employment is down by 542,000.
  • Employment in transportation and warehousing declined by 28,000 in January and is 164,000 lower than in February. In January, job losses occurred in warehousing and storage (-17,000) and in couriers and messengers (-14,000); however, employment in these industries is higher than in February by 97,000 and 137,000, respectively. Employment in air transportation increased by 15,000 over the month but is 105,000 lower than in February.
  • Employment in manufacturing changed little over the month (-10,000), following 8 months of growth. Within the industry, durable goods lost 17,000 jobs in January. Employment in manufacturing is up by 803,000 since April but is 582,000 lower than in February.
  • Construction employment changed little over the month (-3,000), after increasing for eight consecutive months. However, employment in the industry is down by 256,000 since February.
  • In January, employment changed little in other major industries, including information, financial activities, and other services.

Search Consultants Weigh In

“Our board of directors retreat practice partner, who is the former global head of strategy for McKinsey & Company, suggested in a research article early in the pandemic that it is a mistake for organizations to think of the pandemic as a ‘here today and gone tomorrow event,’” said Mike J.R. Wheless, co-founder and managing partners of Anthem Executive. “From this research, we knew that the world would live with COVID much longer than anyone anticipated. This realization is now settling in and COVID-weary organizations are better adjusting to this long term reality.”

Top Executive Jobs in High Demand for 2021
ON Partners annual list of the top executive jobs that are expected to be in demand in the coming year takes on a new twist for 2021. With COVID-19 having upended the business landscape, the search firm surveyed its consultants about the positions that will be critical to helping organizations survive and thrive as the nation moves past the pandemic. Following are the top positions ON consultants anticipate will be in high demand in 2021 as companies work to mitigate the impact of the virus and move into recovery mode.

“We are seeing this play out in the labor market,” Mr. Wheless said. “Hiring is increasing rapidly and we are having one of the strongest recruiting quarters in years.” There are competing forces in the labor market, he said, including the COVID-induced contraction of companies or entire sectors – and there is a tidal wave of seasoned professionals retiring. “Both dynamics are creating a need for people to work differently in today’s reality,” he said. “This seasoned labor market exit has created a very real shortage for top, well-trained talent,” he added. “The demand to replace it, along with those who can adroitly work differently now and in the future, has ignited and the competition for this talent is fierce.”

Due to COVID-19, he said, “video is on now everyone’s desk” and businesses are increasingly moving at the speed of a video connection. “This will cause the hiring cycle to evolve, too,” said Mr. Wheless. “It is the reason we have diligently invested in time to close searches. Since we have long had pre-interview candidate assessment tools in place, we have been using video along with an initial assessment-driven, cultural match detection tool. COVID-19 has only pronounced the fact of how effective this will be for clients in our partnership of leading them into the future. Frankly, it was part luck that we were this prepared and part years of crafting and perfecting these tools and methodologies, before they became nouveau.”

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media

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