ThinkWhy, a SaaS company helping businesses navigate the labor market, released its national jobs report following an announcement from the Bureau of Labor Statistics that the economy added 379,000 jobs in February, with the unemployment rate at 6.2 percent.
“With the vaccine rollout in full swing, and now with a third supplier in the mix, job growth and economic recovery are expected to strengthen. LaborIQ® forecasts a strong rebound that will set off a tidal wave of hiring during the second half of the year, especially for sectors within Leisure and Hospitality, which we’re already seeing as consumers return to pre-pandemic behaviors and resume spending,” said Jay Denton, Chief Analyst and SVP of Business Intelligence for ThinkWhy.
Denton adds, “It’s worth noting that we are now above the lowest trough of the 2007/2008 recession in terms of the relative number of jobs to gain back.”
Job gains in February showed a significant improvement from prior months according to the latest report by the Bureau of Labor Statistics. The 379,000 jobs added in February is a sign of progress after weaker growth in previous months. The early momentum in recapturing lost jobs, and the advancing COVID-19 vaccine availability and distribution, are favorable indicators of the hiring wave LaborIQ® by ThinkWhy expects later this year.
Leisure and hospitality jobs posted a major increase after significant declines the previous two months. The industry gained 355,000 jobs after losing 523,000 jobs combined in December and January. Loosening restrictions in states across the country should propel hiring in the industry as we head into spring.
Optimism that a stronger recovery is around the corner is being fueled further, at least in part, by what could be the beginning of the end of the pandemic. Given the suppressed virus counts, aggressive rollout of the vaccine and warmer weather ahead, improvements in the labor market could start to happen faster than originally expected. This is especially true in locations already lifting restrictions, which could give a faster boost to some of the hardest-hit industries.
“LaborIQ projects the states planning to lift the current business mandates will likely experience greater employment growth and a faster decline in unemployment within the first half of 2021. States evaluating more measured rollbacks of these mandates will follow suit, experiencing a similar economic resurgence later this year,” said Denton.
While questions remain as to how fast our society will be comfortable returning to pre-pandemic behaviors or whether another spike in virus counts is on the horizon, many restaurants and entertainment venues should see a near-term ramp-up in demand where restrictions have been eased. Texas and Mississippi are the latest to join Iowa, Missouri and Florida in more aggressively lifting restrictions. Expect to see a boost to leisure and hospitality jobs in these states over the coming months.
LaborIQ projects a significant acceleration of job growth in the second half of the year. This projection is due to the steady decline of virus counts and growing consumer demand pushing job gains in the right direction. The speed of the vaccine rollout will continue to impact the recovery during the first half of 2021. If projections hold, dwindling virus counts will give way to economic expansion during the second half of the year.
For business planning, knowing which locations and industries will rebound first is key, especially for businesses with flexibility on where and to whom they sell their product. Financial Activities will be one of the first industries to recover; in fact, it already has in some places like Austin, Texas.
In Trade, Transportation and Utilities industry, the recovery timelines are varied based on local market conditions. A smaller number of leading markets recover earlier in the outlook, including:
These areas will lead recovery across multiple types of industries, suggesting stronger local economies in the near term. Consumer spending and hiring velocity could become more challenging because local talent supplies will start to deplete sooner.
“There is a wide gap in impact to jobs throughout different U.S. cities,” Denton said. “Talent supply will begin to dry up in some areas faster than others, prompting population shifts for job seekers from lagging markets. This trend is quickly emerging out of large coastal cities to smaller western states and Sun Belt cities.”
Though local market conditions and reduction of COVID-19 infections will continue to affect progress of an economic rebound, LaborIQ forecasts that specific industries will recover faster than others. Financial Activities, Construction, and Professional and Business Services have gained momentum through the pandemic, while Leisure and Hospitality has sustained massive job losses and may not see recovery until 2023.