Volatile Job Market Persists as Americans Continue to File for Unemployment
September 10, 2020 – The Labor Department reported this morning that 884,000 more Americans filed new claims for state unemployment benefits last week. Economists surveyed by Dow Jones had been looking for a total of 850,000. The latest figures portend an unstable and volatile job market.
The Labor Department changed its methodology from one that used seasonal adjustments to account for normal disruptions in the job market that don’t apply as much under current virus-related conditions.
“With the coronavirus continuing to shut down entire college campuses, the source of all the economic carnage remains unchecked,” said Indeed Hiring Lab economist AnnElizabeth Konkel. “We’ll see if the latest holiday weekend results is spiking cases, which would further hinder the economy’s healing.”
During the week, 48 states reported 14,591,621 individuals claiming Pandemic Unemployment Assistance benefits and 49 states reported 1,422,483 individuals claiming Pandemic Emergency Unemployment Compensation benefits. The highest insured unemployment rates in the week were in Hawaii (20.3), Puerto Rico (16.7), Nevada (16.0), New York (14.9), California (14.8), Connecticut (14.7), Louisiana (13.2), the Virgin Islands (12.6), Georgia (12.2), and District of Columbia (11.5). The largest increases in initial claims for the week were in California (+22,647), Texas (+4,521), Louisiana (+3,662), Tennessee (+1,288), and Missouri (+1,226), while the largest decreases were in Florida (-6,057), Georgia (-5,485), Pennsylvania (-2,627), Wisconsin (-1,422), and Michigan (-1,159).
Job Cuts
Six months into the pandemic, the sluggish rate of recovery has led to a spike in corporate discussions about permanent job cuts, with nearly half of businesses who have already announced furloughs or layoffs saying they expect to make further adjustments in the next 12 months, according to a recent survey by Randstad RiseSmart, an outsourcing firm.
Prior to the pandemic, 86 percent of employers were not planning to conduct separations, said the survey, but the devasting effects of the crisis on the U.S. economy forced drastic, widespread changes in talent strategies. During the peak of the pandemic in April, the unemployment rate rose from a low of 3.5 percent in February to a record high of 14.7 percent. In fact, in recent months, unemployment rose much higher than it did in the two years of the Great Recession.
“The COVID-19 pandemic has posed unforeseen economic burdens on organizations across various industries, leading many employers to make the tough decision to lay off and furlough talent as a result,” said Dan Davenport, president and general manager of Randstad RiseSmart. “While it is a positive sign that the unemployment rate is starting to decrease, we are still in the midst of this pandemic, and based on our survey results, more coronavirus-related layoffs could be on the horizon.”
Recovery Looming
“Although the pace of recovery has been gradual, there is evidence that the U.S. economy is rebounding,” Mr. Davenport said. “The latest Bureau of Labor Statistics jobs report found the unemployment rate decreased to 10.2 percent in August, and more businesses have been given the green light to reopen, leading to an uptick in open positions and an increase in consumer spending. Some industries have been impacted more than others and may either take longer to recover or will not fully recover. For example, even before COVID-19, the brick-and-mortar retail sector was already facing projections of massive job losses. The current environment has accelerated that trend.”
Another Million File for Unemployment Benefits
After coming in under the one million mark for one brief week, new jobless claims registered over a million for the second straight week as COVID-19 continues to impact the U.S. economy. Let’s take a look inside the numbers as Keith Macomber of Capitus Associates weighs in!
“The travel and hospitality industry is likely to recover at a slower pace. Just last week, American Airlines announced major layoffs, as airline passenger volumes aren’t projected to return to 2019 levels until 2023 or 2024,” said Mr. Davenport. “While it isn’t clear when the U.S. economy will fully recover, an important indicator will be the ability for states across the country to keep infection rates low, giving employers the confidence to reopen offices and ramp up hiring.”
Improved Hiring Plans
Employers in the U.S report improved hiring plans for the fourth quarter following the 10 year low reported in Q3, according to the latest “Employment Outlook Survey” released on Tuesday by ManpowerGroup. Overall hiring intentions improved in 37 of 43 countries since last quarter, though 41 declined year-over-year.
“Though we still have a long way to go to recover from what started as a health crisis and has evolved to a social and economic crisis, it is encouraging to see optimistic outlooks in some of the industries most heavily impacted including leisure, retail and manufacturing,” said Becky Frankiewicz, president of ManpowerGroup North America. “We also see employers recognize this recovery will take longer than they initially thought and many are adapting work models for the long term.”
“This is accelerating a shift closer to what we know workers have wanted for some time: autonomy to choose how and where they get their work done, more learning on demand, and a focus on achieving a better blend of work and home,” Ms. Frankiewicz said. “Now is the time for employers to offer targeted skills development and more flexible future-focused work options for those working remote and in the workplace.”
Whether employees get what they want, however, is fast becoming a secondary concern for most companies. The shift from growth and expansion just six months ago to one of pure survival is now the primary focus of every business, with few exceptions.
Related: How C-Level Managers Are Looking for Jobs
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
