Pandemic has been part of our lives for more than one year now. While the first wave disrupted every industry leading to havoc loss in the job market, it is a sigh of relief that the job market is progressing amidst the delta surge. As per the job report by the U.S Bureau of Labor Statistics (August 2021), the job market has slowed down yet continued showing significant progress despite the Covid surge in July and August. The market recovery has started at a slow pace in spite of covid cases rising alarmingly. This is a good sign that the job market has not become stagnant or declining even when the hospitals are beating high records of Covid cases every passing day.
Unlike 2020, people are not confined to their homes anymore. As more people are vaccinated every day, people are willing to get back to their normal through vaccine administration and masking up. US Government has doubled its daily Covid Vaccine doses drive to combat the pandemic and immunizing a major fraction of the population. This step has further contributed to market recovery leading to a greater scope of jobs in the market.
Present Status of Job Market
As most industries were bearing good revenue in June, July, and August 2021, the US job market gained momentum. The diffusion index, i.e, the measure of job gains or losses provided positive news as it was above 50 at 61.7. This clearly indicated that the job market had significant job gains rather than job losses. As per the reports, the US job market in August had contributed to job gains of 235K. If we consider the statistics of the last 3 months, the economy has flourished with over 1 million job opportunities.
In the first wave of the Covid surge, industries such as retail, transportation, recreation, and restaurants experienced a severe setback. However, if we look into the present scenario, most of these covid-sensitive industries have not only recovered but raised gigantic revenues. Similarly, restaurant and retail businesses have incurred relatively smaller losses and are on the way to recovering. Business such as professional services, warehousing, manufacturing, and entertainment has added 74K, 53k, 37K and 36K jobs to the market.
Positive news on Unemployment
Layoffs and unemployment had been a major setback in 2020 as most operations were disrupted. The scenario is quite different today even if the cases are rising in the delta surge. Although retail and restaurant industries contributed to job losses, the overall count of layoffs and unemployment has declined.
The silver lining to this drastic increase of Covid cases due to delta variant was that the median unemployment duration had diminished to 14.7 weeks. Similarly, the reports of forced participation have also decreased. Consequently, the employment rate has been stalling upwards.
Growth of Hourly Wages
The economic growth can be easily determined by the wage structure over the past two years. While most hourly earnings were less than $15 earlier, it has shown an immense growth from $16.60 to $18.70 depending on the industry. This wage growth implicates greater demand for labor in various industries. It cannot be denied that the labor market has experienced significant growth in the last quarter.
Rethinking Remote work
After the onset of the pandemic, most industries shifted to work-from-home culture. However, as the Covid cases were decreasing, a few companies had offered work-from-office. If we look into the statistics, the percentage of workers performing remote jobs had declined from 23.2% to 13.4% from January to August. Amidst delta surge, there are high chances that organizations will continue with remote work culture delaying their work-from-office plans. These delays are expected to continue until the complete market recovery which includes restaurants, dry cleaners, gyms, salons, etc. However, transportation and warehouse are contributing to the job market significantly enabling employment growth.
The Bottom Line
In a nutshell, the scenario in 2021 has been quite different from that of the last year. The economic growth along with job market improvement has been undeniable. Although the pandemic has slowed the pace of their growth, there is no sign of a standstill in the rate of growth. The schools and universities are planning to reopen in person, which may further contribute to the job market. However, it is not possible to predict the number of job gains right now.
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