10 States Reach Pre-Pandemic Employment Levels

March 14, 2022
Author: Mallory Vachon, Ph.D., Sr. Economist

The year began with two months of national employment gains that exceeded many economists’ expectations. January’s 481,000 jobs and February’s 678,000 capped off an impressive stretch of growth – the economy has added an average of 562,000 jobs each month since January 2021. For context, the economy averaged 190,000 jobs per month from 2015 through 2019.

State employment numbers are reported a few weeks after their national counterpart, but the January numbers released March 14, 2022 highlight key trends.

Recovery. Ten states have reached or exceeded pre-pandemic employment levels and are in expansion mode. Combined, these top states are now nearly 450,000 jobs above pre-pandemic levels.

Job Gains for Hardest Hit States. Some states hardest hit in the early months of the pandemic – including California, New York, Pennsylvania and Ohio – are making big gains as they progress toward recovery with double-digit gains in January.

Northeast States Lose Jobs. Five states in the northeast – Maryland, New Hampshire, Rhode Island, Virginia and West Virginia – each lost more than 1,000 jobs in January. The omicron wave, combined with seasonal factors, could have hampered these economies.

Top States for Hiring 2022

Going forward, as job gains and growth stabilize, there will likely be a shift away from comparisons to pre-pandemic employment. The focus will be on the tight labor market as businesses struggle to find and retain talent. Workers are quitting their jobs in record numbers – the voluntary quits rate topped 32% in 2021 compared to an average of around 25% from 2015-2019.

Workers are leaving their jobs for new roles at higher pay with better benefits or more flexibility. And even as businesses increase wages, pay may not be rising enough to keep up with inflation. Based on analysis from LaborIQ, many jobs – including data analyst, human resources manager and software engineer – show 10–15% gaps when comparing in-place salaries versus compensation the market is commanding today.

The outlook for 2022 remains strong but two big variables are the Russia-Ukraine war and the recent surge in COVID-19 cases in China. Both events have the potential to further disrupt the global supply chain, further exacerbating inflation and elevating the risk for a 2022 recession.

LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.