Business Hiring Outlook in the US: Small Signs of Recovery Slipping Away?

Two weeks ago, we released a new publicly available Covid Job Impact website to share daily data and insights on US job listings by industry, job family/role, and region/state.

As we are looking at this data each day, we have watched some hopeful signs of recovery slipping away over the past week.

This observation arrives on the same day that news reports are calling out reductions in the unemployment rate (see Forbes, "The Headlines are Dead Wrong - Unemployment Dropped 16% to 21M"). The total number of people on unemployment insurance has fallen from 24.9M to 21.1M in the past week according to the US Dept. of Labor reporting. A chart of this data is include in our site.

So it's true, but it's in the rear view mirror and we want to look through the windshield.

For quick reference, our site tracks US job listings with all figures being indexed to March 1st (ie, March 1 = 0%).  Since job listings are decisions by businesses to hire, we believe this is reflective of their prospective outlook. And since job listings precede actual hiring by ~3 months, we see this data as a leading indicator of unemployment.

Slipping Away?

While we saw job listings up through mid-March, they quickly tumbled by ~50%, then proceed to bounce around a bit until they seemed to be holding steady in mid-May at around -27%. But over the past week (the last several dots) things have slipped down below -43% (see image).

Together, Apart, and Together Again

Another trend we spotted early on was that all industries fell together in mid-March, then began to diverge as different industries returned to hiring at different rates. While all industries were still down below March 1 levels, the range was wide, with some around -20% and others closer to -50%.  In the most recent week, however, we see them all bending down together again. We think this is signaling a negative business outlook across multiple industries. (See image below with the periods marked out.)

School's Out for Summer?

In the midst of this, we can also see that the Hospitality industry, which fell fastest and stayed down the longest, has started to creep back up a bit. It appears that the Hospitality industry is expressing some confidence, perhaps betting that families will begin travelling now that stay-at-home orders are being lifted and the school year is wrapping up. The exception, viewable on the site, is the state of Nevada which continues to show Hospitality job listings down around -95% compared to March 1st.

So, Will Unemployment Continue to Improve?

As we see unemployment insurance claims dropping a bit, we believe a good portion is people returning to work from temporary unemployment (furloughs, temporary layoffs). These 'hires' will not require job listings. (Some of this was discussed with our guest, former Chief Economist of GE and Deutsche Bank, Marco Annunziata on our recent webinar.)

We believe the reduction in job listings is indicative of a broad-based decrease in the business outlook and that unemployment may drop a bit more as temporary layoffs/furloughs end, but will remain stubbornly high for at least the next couple of months.  If job postings begin to bend upward again toward -25%, there would be good reason to anticipate some material decreases in the unemployment numbers.

One thing for certain: we will be watching this play out daily on the site. Keep an eye out for additional insights on the Covid Job Impacts site: https://covidjobimpacts.greenwich.hr

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