Job Gains Remain Strong as Businesses Await Full Impact of COVID-19
DALLAS–(BUSINESS WIRE)–ThinkWhy, a SaaS company helping businesses navigate a new era of work, has released its U.S. monthly jobs report for February 2020. The U.S. labor market added 273,000 jobs and reports that the unemployment rate returns to its 50-year low of 3.5 percent.
ThinkWhy’s proprietary labor market reporting platform, LaborIQ, forecasts average annual wage growth will hit 3.3 percent for the year with two of the largest sectors, Professional and Business Services & Information, growing at 3.3 and 3.5 percent, respectively.
“The first two months of 2020 have now seen tremendous job gains. February’s numbers continue to prove a strong U.S. economy. However, the recent volatility in the stock market due to COVID-19 fears is understood. The real question going forward is how much impact businesses will absorb due to the disruption of the supply of labor, goods and services,” said Claudine Zachara, President and COO of ThinkWhy. “ThinkWhy continues to guide careful planning for businesses to monitor the health and well-being of their workforce.”
Nominal job gain has started to slow but, absent the outside shock, the fundamentals of the U.S. economy remain very steady. At this time, the effect of COVID-19 has not yet materialized in the jobs number or overall consumer sentiment.
- February Consumer Sentiment Index numbers rose to 101.0, near the economic expansion peak in March 2018 of 101.4.
- Labor force participation rate held steady at 63.4 percent in February 2020.
- The unemployment rate dipped back down to 3.5 percent in February 2020.
- COVID-19 and the length of the economic expansion may have meaningful impacts on supply and demand disruptions, posing stability concerns for financial markets and business investments.
- GDP for Q4 2019 (second estimate) rose 2.1 percent, but full-year 2019 posted its slowest growth in three years at 2.3 percent.
- A global slowdown remains a downside risk to the labor market. With the U.S. being largely service-based and China being largely goods-based, the U.S. supply chain is likely to be impacted.
ThinkWhy® It Matters: Key Takeaways from the February Employment Report
The fundamentals of the U.S. economy remain resilient, but amidst the current environment, employers can:
Consider employee welfare a top organizational priority. Encourage remote work, limited business travel and paid sick leave as staples of employee well-being.
- Ensure your company has proper HR communication strategies in place for workers impacted by the unfolding conditions.
- Run outage scenarios – both labor and the supply chain – and prepare contingency plans.
- Focus on competitive wages and retention initiatives for professional and tech employees, as the white-collar employment sector is traditionally more resilient to short-term economic impact than blue-collar workers.
- Consider short-term reductions in hiring for lower skill, blue-collar employment in entertainment, hospitality, hotel and restaurant entities, as these areas are impacted sharply, albeit briefly, by critical healthcare events.
- With the outside shock from COVID-19, impact to the U.S. economy is expected. This impact will primarily affect the Manufacturing, Trade, Transportation and Utilities and Leisure and Hospitality industries. In a worst-case scenario, a steep short-term deceleration in job growth could occur.
- International trade and unexpected geopolitical volatility, including Middle East conflicts and the coronavirus, will be a big driver of consumer and business confidence in the near term.
- Average annual wage growth will hit 3.3 percent for the year, with two of the largest sectors, Professional and Business Services and Information, growing at 3.3 and 3.5 percent, respectively.
For additional analysis and forecasts, including long-term job and wage growth, industry performance and key economic indicators that impact business and hiring decisions, click here to read the full report from ThinkWhy.
LaborIQ is currently available for all U.S. organizations. For additional information on LaborIQ, please visit ThinkWhy.com.
ThinkWhy is helping companies navigate a new era of work by creating modern, human-centered software that supports better career lives. ThinkWhy’s flagship product, LaborIQ, creates actionable answers for employers around market performance, talent supply and demand and salaries, while benchmarking individual and teams, driving both tactical and strategic decision making.
Learn more at www.ThinkWhy.com or follow us on Twitter and Instagram at @ThinkWhy_ and on Facebook at @ThinkWhyLLC and LinkedIn at @ThinkWhy-LLC.
KWT Global for ThinkWhy