Early in the recovery, it is evident the rebound of the labor market will not be a steady path. National job growth has garnered headlines for the largest positive gains on record in recent months, but the macro trends can mask some of the underlying stories. For instance, while net job gains exceeded 1.7 million at the national level in July, not every metro location was in positive territory. In fact, seven major metro locations experienced a loss of jobs in July, despite very solid gains in June.
Washington, D.C. lost 7,100 jobs in July, the biggest decline of any major metro. Miami showed how difficult it can be to forecast job growth in a market in today’s conditions, adding 99,000 jobs in June, but then cutting 4,500 jobs just a month later. While these declines pale in comparison to the drops seen in the initial impact of the pandemic, they signal that the path ahead is likely to be bumpy.
It is important to understand the momentum, or lack thereof, in the recovery for different locations. It signals the health of the local economy, and it can indicate how quickly recruitment and hiring will accelerate.
The specific factors resulting in the slowdown will vary across metros. The biggest damper for most local economies has been the need to stop the spread of COVID-19. The uncertainty of a vaccine has made it difficult for businesses to know when an end date to the recession will be near. Metros where the economy depends on tourism, in-person events, and college students living on campus have taken large hits, as virus prevention measures limit when these types of businesses can return to full operating capacity. Local government institutions will be affected, as they depend on the taxes received by local businesses.
The current lack of job growth and recession will not last forever. Businesses will need to be able to plan for the pending recovery. LaborIQ by ThinkWhy provides forecasts through the end of 2026, so that longer-term, more strategic business decisions can be made.
ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs, industries, occupations and business across the U.S.