The first Jobs Report of 2021 was released last week. The good news is that the economy added 49,000 new jobs, marking a turnaround from December 2020. Nevertheless, that is slightly below analyst’s expectations and indicates that the recovery’s momentum may be slowing:
·Overall unemployment fell to
6.3%from
6.7% in at the end of 2020
·The rate for college-degreed workers aged 25+ increased to
4.0%from
3.8%in December, the first such increase seen since the early days of the COVID-19 pandemic
·
49,000 jobs were added in January, barely nudging the labor market back into growth mode
·Revisions to December figures showed that
227,000jobs were lost that month, resulting in a net negative adjustment of
159,000compared with the figures that were originally reported for November & December combined
·Locally, unemployment in Columbus, OH is significantly below the national average, clocking in at
4.7% for December 2020 (most recent data available)
The headline figures tend to get the most attention, but (as always) the details paint a more complicated picture. For example, professional and business services
added nearly 100,000 jobslast month, in addition to the 156,000 jobs added in December, indicating market demand is strong for positions that can be done remotely and are thus more insulated from the pandemic. Most of the offsetting job losses were in industries you might expect, such as leisure, hospitality, retail, and other sectors of the economy that continue to be ravaged by COVID-19. Additionally, the 0.4% drop in overall unemployment coincided with a decline in the labor force participation rate, indicating that a greater share of previous job losses may be becoming permanent.
To complicate matters further, Q4 GDP figures (released late last month) also reveal a mixed bag. Although GDP grew at an annualized rate of 4.0% during the quarter, the majority of those gains occurred in October. In fact, it’s possible that GDP actually contracted in November and December. Most economists are attributing this to a surge in coronavirus cases, the resulting restrictions on activity, and the diminishing impact of earlier stimulus efforts. With the Biden Administration officially assuming office last month, it’s likely that we’ll soon see some level of additional stimulus, but there is serious debate in Washington D.C. regarding the appropriate scale and scope. Business leaders and capital markets are signaling increased optimism for now, but only time will tell what impact this new administration will have on the broader economy and the labor market.
Anecdotally, my team in Central Ohio is seeing strong demand across a variety of industries (manufacturing, non-profit, healthcare, technology) for accounting & finance professionals. Most candidates today are entertaining multiple job opportunities, indicating that we may soon return to pre-pandemic labor market dynamics. Robert Half recently released our bi-annual Demand for Skilled Talent report. The key takeaway: “
Companies expect to hire this year, yet staffing challenges persist. Remote and hybrid work is the new normal, and many workers are considering relocation.” Please find attached a link to the full report:
The Demand for Skilled Talent – 2021 Q1.
As always, please let me know if there’s anything we can do to assist from a personnel standpoint – whether it’s direct hire, temp-to-hire, contractor or consultant, I’d be more than happy to help.
Hunter Lent, CPA
Client Service Director
Phone: (419) 297-5841
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