2021 Job Growth Off to a Slow Start in U.S.
Massive divide in amount of available talent
DALLAS, Feb. 5, 2021 /PRNewswire/ -- ThinkWhy, a SaaS company helping businesses navigate the labor market, released its national jobs report following an announcement from the Bureau of Labor Statistics that the economy added 49,000 jobs in January, with the unemployment rate falling to 6.3 percent.
Today's report shows muted growth with 49,000 jobs added in January compared to the stronger recovery in the summer and early fall of 2020. The rise in COVID-19 cases and tightening restrictions during last year's holiday season lingered into 2021, and certain at-risk industries continued to face the brunt of the challenges caused by the pandemic.
Leisure and Hospitality, which includes restaurants, hotels and entertainment, continued to shed jobs in January. While overall employment gain was 49,000 for all industries, Leisure and Hospitality lost 61,000 jobs and the rest of the job market gained 110,000.
"There is a massive divide in the amount of available talent based on the type of job – high-wage versus low-wage, white-collar versus blue-collar," said Jay Denton, Chief Innovation Officer and SVP of Business Intelligence for ThinkWhy. "Many high-skilled roles such as architecture, engineering, and technology have unemployment rates of 3.0% or less. Service-related jobs, particularly those that rely on face-to-face interactions such as food preparation and serving, still have double-digit unemployment rates."
The number of Americans unemployed fell to 6.3% in January, but the rate varies dramatically depending on the occupation.
- Computer and Mathematical (2.4%)
- Community and Social Service (2.9%)
- Healthcare Practitioners and Technical occupations (2.0%)
- Food Preparation and Serving Related (16.5%)
- Personal Care and Service (14.2%)
- Building and Grounds Cleaning and Maintenance occupations (10.4%)
Despite the current economic climate, efforts to rein in COVID-19 and increase vaccinations are expected to eventually result in positive momentum. "The second half of the year should see a significant surge in hiring in those occupations most impacted by the pandemic," added Denton.
While virus counts are decelerating in many areas and vaccine rollouts are projected to increase in pace, more infectious strains of COVID-19 add a degree of uncertainty to how quickly we can reach a turning point.
For now, the expectation of a significant rebound in the second half of 2021 is still the best scenario. The strength of the rebound will depend on how quickly we can return closer to normal behaviors and whether businesses are able to ramp up hiring as revenue growth accelerates.
The Outlook
LaborIQ® by ThinkWhy projects a significant acceleration of job growth in the second half of 2021. The first half of the year will be marked by the rollout of the vaccine, and if projections hold, dwindling virus counts will give way to economic expansion in the second half of the year.
This week, the Congressional Budget Office announced it expects gross domestic product (GDP) to return to pre-pandemic levels by mid-2021. Increased business revenues, bundled with the potential of eased social restrictions, have the potential to lead to the largest hiring wave the U.S. has ever seen.
The following locations are poised to be among the first to recover all lost jobs. While the overall employment totals for these markets will still take until 2022 to reach their pre-pandemic levels, some of the top-performing industries will have recovered all jobs by the end of 2021 in these cities.
- Atlanta-Sandy Springs-Roswell, GA
- Austin-Round Rock, TX
- Birmingham-Hoover, AL
- Dallas-Fort Worth-Arlington, TX
- Indianapolis-Carmel-Anderson, IN
- Oklahoma City, OK
- Phoenix-Mesa-Scottsdale, AZ
- Salt Lake City, UT
INDUSTRY RECOVERY
Though the rate of vaccination will continue to impede progress, LaborIQ forecasts a few industries will recover faster than others. Financial Activities, Construction, and Professional and Business Services have been able to gain momentum through the pandemic, while Leisure and Hospitality has sustained massive job losses and may not see recovery until 2025.
To read the full report, click here.
About LaborIQ by ThinkWhy
LaborIQ® by ThinkWhy is a breakthrough technology providing talent acquisition professionals with talent and labor market intelligence.
Our talent tech helps win candidates – and clients - with the most precise compensation and job market answers for over 20,000 job titles, across all U.S. cities and industries. LaborIQ's employment reporting and forecasts, talent supply index and compensation toolkit deliver a competitive advantage in recruiting and hiring.
Learn more at ThinkWhy.com or follow us on Twitter and Instagram at @ThinkWhy_, on Facebook at @ThinkWhyLLC and LinkedIn at @ThinkWhy-LLC.
SOURCE ThinkWhy
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