Unemployment Rate Remains at 6.7 Percent as Recovery Looms

With a new President set to take office and COVID-19 vaccines continuing to be distributed, the unemployment rate was unchanged last month. Let’s take a look inside the latest unemployment numbers released by the Department of Labor this morning as search professionals from Young Search Partners, Robin Judson Partners, and Whitham Group weigh in.

January 8, 2021 – Employment rose by 140,000 in December as the U.S. unemployment rate was unchanged at 6.7 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.

Nonfarm payrolls decreased by 140,000 jobs last month, the Labor Department said. Data for November was revised up to show 336,000 jobs added instead of 245,000 as previously reported. That was the first decline in payrolls since April. The economy has recovered just over half of the 22.2 million jobs lost in March and April.

“Although the approval of two much-anticipated coronavirus vaccines in December is a key step towards recovery, the loss of private sector jobs highlights the lack of predictability that continues to exist in the labor market,” said Rebecca Henderson, CEO of Randstad Global Businesses and executive board member. “As we await more widespread vaccine distribution and a return to a more stable economic environment, employers should look to utilize flexible labor and contingent workers to both address skills deficiencies and ensure that they can quickly respond when business demand returns for what experts are still predicting to be a year of strong economic growth.”

“What’s really driving the economy is still the path of the virus,” Erica Groshen, a senior economics adviser at Cornell University and the former commissioner of the U.S. Bureau of Labor Statistics, told ABC News ahead of the report’s release. Ms. Groshen noted that December’s data likely reflects the surge in cases after Thanksgiving and the restrictions put in place to quell its spread.

Where Job Growth Occurred

  • In December, employment in leisure and hospitality declined by 498,000, with three-quarters of the decrease in food services and drinking places (-372,000). Employment also fell in the amusements, gambling, and recreation industry (-92,000) and in the accommodation industry (-24,000). Since February, employment in leisure and hospitality is down by 3.9 million, or 23.2 percent.
  • Employment in private education decreased by 63,000 in December. Employment in the industry is down by 450,000 since February.
  • Government employment declined by 45,000 in December. Employment in the component of local government that excludes education declined by 32,000, and state government education lost 20,000 jobs. Federal government employment increased by 6,000. Since February, government employment overall is down by 1.3 million.
  • Other services lost 22,000 jobs in December, with over half of the loss in personal and laundry services (-12,000). Employment in the other services industry is down by 453,000 since February.
  • In December, employment in professional and business services increased by 161,000, with a large gain in temporary help services (+68,000). Job growth also occurred in computer systems design and related services (+20,000), other professional and technical services (+11,000), management of companies and enterprises (+11,000), and business support services (+7,000). Employment in professional and business services is down by 858,000 since February.
  • Retail trade added 121,000 jobs in December, with nearly half of the growth occurring in the component of general merchandise stores that includes warehouse clubs and supercenters (+59,000). Job gains also occurred in non-store retailers (+14,000), automobile dealers (+13,000), health and personal care stores (+10,000), and food and beverage stores (+8,000). Employment in retail trade is 411,000 lower than in February.

Related: Five Ways to Maximize Recruitment Success

  • Construction added 51,000 jobs in December, but employment in the industry is 226,000 below its February level. In December, employment rose in residential specialty trade contractors (+14,000) and residential building (+9,000), two industries that have gained back the jobs lost in March and April. In December, employment also increased in nonresidential specialty trade contractors (+18,000) and in heavy and civil engineering construction (+15,000).

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.

  • Employment in transportation and warehousing rose by 47,000 in December, largely in couriers and messengers (+37,000). While employment in transportation and warehousing overall is 89,000 lower than in February, employment in couriers and messengers has increased by 222,000 over the same period. In December, employment also grew in warehousing and storage (+8,000) and in truck transportation (+7,000), while transit and ground passenger transportation lost 9,000 jobs.
  • In December, healthcare added 39,000 jobs. Employment growth in hospitals (+32,000) and ambulatory healthcare services (+21,000) was partially offset by declines in nursing care facilities (-6,000) and community care facilities for the elderly (-5,000). Healthcare employment is 502,000 lower than in February.
  • In December, manufacturing employment increased by 38,000, with gains in motor vehicles and parts (+7,000), plastics and rubber products (+7,000), and nonmetallic mineral products (+6,000). By contrast, miscellaneous nondurable goods manufacturing lost 11,000 jobs over the month. Despite gains over the past 8 months, employment in manufacturing is 543,000 below its February level.
  • Wholesale trade employment rose by 25,000 in December but is down by 251,000 since February. In December, job gains occurred in durable goods (+11,000) and nondurable goods (+11,000).

Related: Getting on with Hiring in the Face of a Crisis

  • In December, employment changed little in other major industries, including mining, information, and financial activities.

Search Consultants Weigh In

“Despite a challenging year with the pandemic and its impact on many businesses, hiring continues to be not only robust but a critical imperative as organizations look for key leadership talent to lead their organizations forward,” said Katherine Young, managing partner and president of Young Search Partners.

“Throughout 2020, portions of the investment community have been actively adding to their teams this past year,” said Robin Judson, managing partner and group founder of Robin Judson Partners LLC. “At this point, it appears that 2021 will see continued expansion of recruiting for individuals who can take on a senior roles in providing private credit solutions and tactical opportunities.”

“Since I have been focused solely on renewable energy recruitment for the last decade, I have seen the ups and downs of the clean energy industry,” said Carina Whitham, president of Whitham Group Executive Search. “When the pandemic hit around 17.8 percent of the sector’s workforce was hit pretty hard according to The American Council on Renewable Energy. There is hope to bounce back with the $40 billion stimulus bill which includes renewable energy tax credits which were extended for two years for technologies including fuel cells, microturbine, combined heat and power and small wind energy.”

“Our executive search assignments have been for companies that are scaling due to massive growth in hydrogen, energy storage, community and commercial scale microgrids,” Ms. Whitham said. “The entire renewable energy industry has had to adapt to the new challenges posed by COVID-19 and the goal is not only to bring back every job lost but add additional roles thanks to the injection of the stimulus bill into our workforce and environment.”

Related: Talent Acquisition Success Factors in the Age of COVID-19

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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