As COVID-19 cases continue to climb across the U.S., the Labor Department reported this morning that 963,000 more Americans filed new claims for state unemployment benefits last week. While not exactly good news, this is the first week since March where claims were reported below the one million mark for the week. Economists were expecting initial claims of 1.1 million and continuing claims of 15.8 million, based on median estimates. Economists note that it’s encouraging that claims for unemployment are going down because it means people keep returning to work.
While the sub-one million reading marks a milestone, there’s still plenty of work to do for the job market to get back to normal. Those collecting benefits for at least two weeks, known as continuing claims, totaled nearly 15.5 million, a decrease of 604,000 from a week ago but still well above pre-pandemic levels.
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The nation’s vast executive search community and their clients are quickly adapting to the new realities of Covid-19 – and what it means for hiring in 2020 and beyond.
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President Donald Trump last weekend authorized the payment of $300 a week in federal aid to unemployed Americans, smaller than the $600 benefit that expired in July – and limited by funds that could run out within two months. “It is certainly possible that we don’t come back, at least in certain sectors, in the same way as before,” said Mary Daly, president of the San Francisco Federal Reserve. That will mean a large number of workers are not able to go back to the same jobs they had before the pandemic.”
Diversified Search placed Mary Daly as the 13th CEO of the Federal Reserve Bank of San Francisco. Dale Jones, president and CEO, led the search with board practice head Veronica Biggins. Ms. Daly, who is openly gay, became the third woman among the 12 presidents of the Fed’s regional banks.
Dallas Federal Reserve president Robert Kaplan said that if Americans do not comply with public health orders to contain the virus, unemployment will stay at around nine percent until at least 2021. “If we don’t follow that, while people may feel freer, the economy will grow slower,” he said.
During the week, 49 states reported 10,723,396 individuals claiming pandemic unemployment assistance benefits and 49 states reported 1,224,443 individuals claiming pandemic emergency unemployment compensation benefits. The highest insured unemployment rates in the week were in Nevada (23.6), Hawaii (21.1), Puerto Rico (19.1), Louisiana (17.3), New York (16.5), California (16.0), Connecticut (15.3), Georgia (14.4), Massachusetts (14.3), and Rhode Island (12.7). The largest increase in initial claims for the week was in Rhode Island (+87), while the largest decreases were in California (-22,610), Virginia (-19,048), Texas (-14,095), Florida (-13,176), and New Jersey (-11,489).
Data from Homebase, a payroll scheduling and tracking company, showed a decline in employment last week. Figures from Kronos, a workforce management software company, showed a flattening in the number of shifts worked.
Last week, employment rose by 1.8 million in July as the U.S. unemployment rate fell to 10.2 percent. That’s down from a peak of 14.7 percent in April, but still far above the 3.5 percent rate in February before the coronavirus pandemic led to mass economic shutdowns across the country. “We believe the labor market reached an inflection point in July, starting what will likely be a slower phase of recovery,” said Nomura economist Lewis Alexander said in a note ahead of results. “Stronger-than-expected employment growth in May and June was likely due in part to faster and more widespread re-opening activity. However, that earlier re-opening activity likely contributed to the resurgence in Covid-19 activity across the country, resulting in what we expect will be slower employment growth in July.”
Top Search Consultants Weigh In
“There are still new hires being made, but many tend to be replacement hires for an existing opening,” said Anna McCormick Kelch, co-CEO of LPA Search Partners. “Our clients have told us they have talent needs — especially as it relates to technology and digital transformation — but it is difficult to bring in new people if you have furloughed a significant percentage of your employees…bad optics. There is a sense now that a window of opportunity has opened to bring in some necessary skills that will be essential as companies continue to pivot.”
“I believe that the economy is in rebound mode and that hiring will start to turn the corner in the fourth quarter,” said Alan Work, founder and president of Work&Partners. “Clearly the election will have an impact on things but traditional views of Democratic or Republican administrations and its resulting economies may not hold.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor Hunt Scanlon Media
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