The job market is still in recovery, but it’s also still losing momentum
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The economic recovery flashed green in late spring and early summer as much of the country emerged from pandemic shelter-at-home orders and businesses reopened.
But the restoration of jobs, and the fall in unemployment, have slowed since that early rebound from the first wave of COVID-19 shutdowns. And there are some warning signs flashing yellow now as we head into the end of the year. The most recent report Friday from the Labor Department said the unemployment rate fell to 6.9% from 7.9% in September. But eight months after the virus struck the United States, the economy still has recovered barely half the 22 million jobs that were lost to the pandemic.
The economy, which had rebounded sharply in the July-September quarter as businesses reopened from virus-related shutdowns, is now expanding more slowly.
This recession is not like most others, said Dean Baker at the Center for Economic and Policy Research.
“I mean we haven’t had — at least since 1918 — a pandemic-based downturn,” Baker said.
And now, with COVID cases, hospitalizations and deaths rising, Baker said data on restaurant reservations show a sharp decline.
“That’s likely an indicator of people’s willingness to go out, be in contact with other people,” he said. “As the virus spreads, that’s just going to get worse and worse.”
There’s also mounting risk as the pandemic drags on that what were originally temporary job losses will turn permanent. Wendy Edelberg at the Brookings Institution’s Hamilton Project said that’s especially true of service businesses, a lot of which are small.
“Hundreds of thousands of small businesses are failing, at about three times what would be a normal rate,” Edelberg said. “That is no doubt one of the reasons we’re seeing so many people say that their previous jobs are permanently gone.”
Even businesses that are doing OK in the pandemic still face a lot of uncertainty. Robert Frick, corporate economist at Navy Federal Credit Union, said one big question is whether there will be another round of economic stimulus from Congress to boost demand for goods and services.
“From the businesses I talk to, not knowing has an effect on forecasting for the future, on orders, on hiring,” Frick said.
Daniel Zhao at job site Glassdoor said right now hiring is most resilient in warehousing and transportation, construction and manufacturing.
Overall, Glassdoor’s job postings are still down by 10% compared to last year, with hiring weak in education and government as tax revenues have fallen in the pandemic.
And, Zhao said, “holiday hiring is below levels that we’d seen last year. There is still an open question whether the rising COVID-19 cases are going to slow down the recovery further in the winter.”
During the pandemic, when COVID cases are surging, consumer confidence tends to fall.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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