ThinkWhy, a SaaS company helping businesses navigate the labor market, released their national jobs report following the announcement from the Bureau of Labor Statistics that the economy added 1.4 million jobs in August with the unemployment rate at 8.4 percent.
August was the fourth highest month of job gain on record, following the previous three months of unprecedented growth from May to July. Still, tens of millions remain unemployed, and challenges will persist until COVID-19 is under control.
“Though job gain remained at a historic level, the supply of talent varies significantly by location, industry, and experience. Practically every metro shows a relative surplus for entry-level workers seeking employment, even in some high-demand technology jobs,” said Jay Denton, SVP, Business Intelligence and Chief Innovation Officer at ThinkWhy. “Talent supply for occupations in finance and the professional and business industries is often tighter than others, but it favors those with at least a few years of hands-on experience in today’s environment of needing immediate results.”
Looking to the fall, it is hard to envision a major boost to demand for some of the hardest hit industries. Among other things, September and October are usually known for being major months for conferences, as well as the kickoff for major sports seasons. Given practically all large, in-person events have been cancelled or their capacity significantly limited, it will put more pressure on travel and other associated industries within local economies.
Labor Market Performance:
- Unemployment sits at 8.4%
- Temporary layoff level is 6.16 million
- August’s job gains concentrated in industries such as Government (344,000) and Trade, Transportation and Utilities (341,000)
- In addition, total nonfarm payroll average hourly earnings increased by 0.4% month-over-month ending in August 2020
Why It Matters: Key Business Impact
Until a vaccine is available, there will likely be some bumpy months of growth ahead, whether it be certain industries, metro locations or the nation overall. Still, the expectation of a strong rebound on the other side of COVID-19 is the baseline. Until then, look for certain industries to remain much stronger than others. Recruitment for these types of businesses will likely remain more robust than others through the all: finance and insurance, home delivery services, grocery stores, computer equipment, utilities, federal government, housing construction, and scientific research and development.
As businesses strategically plan for recovery and growth, LaborIQ by ThinkWhy advises businesses to:
- Know talent supply and demand shifts and the accompanying salary demands by market, as you grow or expand operations.
- Keep a pulse on labor market performance and the impact to your location and industry.
- Identify the leading and lagging industries to strategically expand your client base, partnerships or acquisition opportunities, as variances can dramatically impact investment and operational strategies.
- Focus on industry and metro growth performance to identify sales, marketing and business development opportunities.
INDUSTRY RECOVERY TRACKER
The LaborIQ by ThinkWhy base forecast is for the labor market to return to its pre-pandemic level by mid-to-late 2023. There are several industries poised to lead that date, while a few others could lag it significantly. This projection is based on moderate growth during the upcoming fall and winter seasons, which is then followed by more sustained and strong job growth beginning in mid-2021.
The following list shows when each industry is expected to return to its pre-pandemic employment level, as well as some factors to monitor for its success.
- Construction –Residential home-building and specialty trades will need to carry this sector.
- Financial Activities – This industry has been impacted the least up to this point and will likely be one of the first industries to regain full employment.
- Healthcare –Once elective and preventative procedures return to normal levels, this industry will remain one of the most in-demand in the country due to an aging baby boomer population.
- Professional and Business – This is projected to be the strongest performing sector by the end of 2022.
- Trade, Transportation, and Utilities – Working through the logistics of ramping up airlines and other types of transportation could be the wildcard. This forecast will also be reliant on non-grocery retail stores making a comeback as consumer behavior returns to its previous pattern.
- Manufacturing –More jobs shifting back to the U.S. would help achieve this forecast.
- Government –Local and state governments are the concern for this group as the effects from pandemic could impact them for years.
- Leisure and Hospitality – This timeline has a lot of potential to move up quickly if the economy is healthy and people return to previous normal social behaviors, especially travel and dining.
- Mining and Logging –The energy sector has gone through multiple disruptions in the past several years, and slower growth is currently projected as it stabilizes.
To read the full report, click here.
About LaborIQ by ThinkWhy
ThinkWhy is helping companies navigate a new era of work by creating modern, human-centered software that supports better career lives. ThinkWhy’s software application, LaborIQ, is the leader in talent tech software, helping recruiters win candidates – and clients – with precise salary answers for over 20,000 job titles across all U.S. cities and industries. It provides users with a strategic edge for business growth with employment reporting and forecasts, supply and demand insights, compensation benchmarking, and custom reporting tools.
Learn more at www.ThinkWhy.com or follow us on Twitter and Instagram at @ThinkWhy_, on Facebook at @ThinkWhyLLC and LinkedIn at @ThinkWhy-LLC.