Latest Jobs Data: Swings of a Pendulum
|Nonfarm payrolls increased for the fifth consecutive month during November but showed continued signs of a slowing labor market recovery. Employers added 245,000 workers to payrolls on net last month, which is less than half of October’s gains. For context, the U.S. averaged 177,000 new jobs per month during 2019 when unemployment rates hovered near all-time lows. The deceleration in job gains came as a surprise to the downside for market forecasters, but the graphic below shows we are seeing a sharp turnaround in comparison to previous economic downturns.
On a more positive note, the labor market experienced less churn last month as job cuts declined and layoffs came close to early-2020 levels. The technology, transportation, and entertainment/leisure sectors accounted for more than half of the job cuts while the number of people temporarily laid off declined 13.8%. Permanent job losses have held steady for three months at approximately 3.7 million, which is meaningful in terms of long-term labor market stability.
Seasonal hiring across the U.S. is expected to total nearly 760,000 jobs according to Challenger, Christmas & Gray, providing a welcome short-term shot in the arm. Some businesses, however, appear to be tapping the breaks on hiring. Glassdoor reports job openings declined 2.5% last month, and the five largest seasonal companies (Amazon, FedEx, Macy’s, Target, and UPS) plan to hire 24.5% fewer workers this holiday season relative to 2019.
Business and activity restrictions will weigh on the confidence of firms and consumers alike. The re-imposition of restrictions amidst an ongoing surge of the coronavirus could alter hiring plans for businesses in affected states. Last week, California announced some of the strictest measures with a regional stay-at-home order based on hospital capacity. State officials in Iowa, Michigan, New Mexico, Oregon, and Washington, among others, have also enacted new restrictions as have many local leaders.
Percentage Change in Nonfarm Payrolls from Start of Past Four Recessions
Sun Belt Markets Attracting New Workers Amidst Nationwide Labor Churn
|While national employment data shows considerable losses since the beginning of the pandemic, Sun Belts cities have attracted large numbers of relocating workers over the past year, according to LinkedIn data on user profiles. Austin, TX easily leads the way as 1.4% of the metro’s LinkedIn members having arrived in the city during the past year. Charlotte, NC and Tampa-St. Petersburg, FL round out the top three.
Metro areas with high levels of in-migration count among the top performers in hiring activity as measured by jobs found via LinkedIn. The pace of hiring in Denver, Austin, and Phoenix has retraced or nearly retraced to year-ago levels, and all three cities rank among the top ten in new profiles.
College towns, especially those with major public institutions, have experienced the greatest outflow in LinkedIn members probably because students in these cities have opted for remote learning or a gap year during the pandemic. Bryan-College Station, TX; State College, PA; and Urbana-Champaign, IL have lost the most LinkedIn users over the past year.
Top LinkedIn Profile Growth Per 10,000 Members: Past 12 Months
Movie Theaters’ Plights Could Have Ripple Effects on Local Businesses
|WarnerMedia announced last week that its 2021 slate of new movies will be released concurrently on streaming services, a move that will likely create headwinds for theaters and other businesses reliant on moviegoers. Box office sales have plummeted 80.1% YOY year-to-date as restrictions closed theaters for weeks at a time, and many studios postponed major releases.
Prolonged headwinds may not have a large, direct effect on staffing in the movie industry, which is already operating with skeleton crews. The sector has not seen meaningful employment gains during the recovery, and sector payrolls are down 43.5% since January, according to the Bureau of Labor Statistics.
However, concurrent streaming could further undermine businesses that rely on moviegoers. Movie theaters typically serve as anchors in the malls or shopping centers where they are located, generating foot traffic that benefits nearby businesses. But if movie fans choose to watch new releases online instead of at the theater, they may be less likely to frequent nearby restaurants and bars for dinner, drinks, or dessert.
2020 and 2019 Weekly Box Office Receipts
The Weekly Briefing - December 7th, 2020
The Weekly Briefing – December 7th, 2020:
In This Week’s Brief:
- Latest Jobs Data: Swings of a Pendulum
- Sun Belt Markets Attracting New Workers Amidst Nationwide Labor Churn
- Movie Theaters’ Plights Could Have Ripple Effects on Local Businesses