The Job Market: One Year After COVID-19 Began
Palm Beach County’s latest unemployment rate (March) is 4.7 percent -- below the rate for both the nation and state for the seventh consecutive month. The county’s unemployment rate is approaching pre-pandemic unemployment levels.
It may be hard to believe that 88 percent of the number of jobs in the county have been recovered since the period of highest unemployment in 2020 and the number of those working now is nearing the number of those working when the pandemic began. The county’s labor force increased from 727,766 in Feb. to 734,544 in March which means more people are working or looking for work. There is strong employment and economic growth being driven by extended federal relief, increased consumer spending, falling COVID cases and expanded vaccine rollout.
Although 78,366 people in the area lost their jobs during the pandemic, Palm Beach County suffered less than the nation and most of the state.
Unemployment in March 2020 rose to 4.3 percent statewide and 4.4 percent in Palm Beach County. Two months later, Florida’s rate shot up to 14.3 percent and Palm Beach County reached a record high 14.1 percent (all numbers not seasonally adjusted). Every industry sector lost jobs, with the Leisure and Hospitality sector leading the way.
The outlook gradually improved. In September, Palm Beach County’s rate fell to less than half of the record peak to 7.0 percent, and lower than the state and nation every month since then. For a year, the county’s unemployment rate stayed below other major state markets, including Miami-Dade County, Broward County and the Greater Orlando area. These areas with large numbers of theme parks, cruise ships and international flight traffic have taken the longest time to recover.
Why did Palm Beach County do better than most? I see three contributing factors:
- Palm Beach County’s economy is more diversified than it was in the Great Recession. Professional, technical and financial sectors generally have had the most job gains month-to-month. During the Great Recession, the traditional “big three” -- hospitality, construction, and real estate – suffered the most job losses with Palm Beach County unemployment often faring worse than the state and nation.
- COVID-19 began when Palm Beach County’s economy was strongest and towards the end of the 19-20 winter tourist season when seasonal layoffs normally occur. Job gains began to return as businesses reopened from COVID and began ramping up for the 20-21 season.
- Businesses in the high-tax northeast and western parts of the nation struggling with high numbers of COVID cases decided to relocate to South Florida. The Business Development Board of Palm Beach County has been leading a successful ‘Wall Street South’ initiative focused on bringing more major financial service firms to the area.
So – what’s ahead for the job market?
The post-pandemic job market will not look the same as it did before COVID. Practices we have become accustomed to -- working, shopping, dining and enjoying entertainment at home -- may have permanently changed the job market.
How the job market and economy fully recover depends on:
- When customers feel confident enough to return to restaurants, bars, shops, theaters, sporting events and vacation travel.
- How many people will continue to work from home, leaving commercial office space vacant.
- To what extent business travel recovers now that workers have become accustomed to attending meetings and collaborating using video platforms.
- The pace of vaccination rollouts
The March unemployment rate for Palm Beach County is now 4.7 percent, that was lower than the state rate at 5.3 percent and the nation at 6.2 percent (all numbers not seasonally adjusted). This is a positive local job recovery with 4,300 more employed compared to February 2021. Locally we are only 30,800 jobs down compared to March 2020.
Will the business community be ready when the Pandemic ends?
Most recent economic data shows that economic growth is recovering from the pandemic-induced lockdowns faster than many economists expected. The Institute for Supply Management (ISM) manufacturing index in March rose to its highest level in thirty-seven years. The monthly employment report for March was much better than anticipated, with 4,300 jobs being created in Palm Beach County from February to March 2021, with 66,600 created in Florida and 916,000 jobs being created in the United States during that same timeframe. The ISM national services index also improved in March, with all 18 service industries exhibiting growth. The success of the vaccination rollout is enabling consumers to go out for entertainment more often, and that certainly is a welcome change for our local Hospitality sector now seeing hotel occupancy upto 80% capacity!
High-frequency data, or data that can be collected almost immediately after transactions take place, confirm that activity has started to rebound more quickly. Airport traffic, restaurant dining, and hotel occupancy are all rising fast. In March, the Consumer Confidence indicator posted its biggest one-month gain since 2003.
Also, the quarterly change to the JPMorgan Forecast Revision Index, which measures how much economic forecasts have changed either upward or downward over the course of the quarter, had its single biggest upward move in history.
The seven most populous states, California, Texas, Florida, New York, Illinois, Pennsylvania, and Ohio are also the seven biggest contributors to U.S. GDP, according to the Bureau of Economic Analysis. Florida is now contributing 5.1 percent of the national GDP (see chart).
By the end of the quarter, an historic stimulus bill was on target to be passed, and additional spending on infrastructure was being discussed. COVID-related deaths and hospitalization rates, which were still trending higher to start the year, are now falling rapidly in most states including Florida.
Already, many states are following us in Florida and begun lifting COVID-related restrictions. In the span of just a few months, an expectation of stronger growth has turned fears that the recovery would be derailed into fears that the economy will become overheated. Inflation climbed 4.2% for the twelve months ending in March, and Treasury yields have risen accordingly. The Ten-Year Treasury Bond yield increased from 0.93% to 1.74% during the first quarter of 2021.
Still, Federal Reserve Chair Jerome Powell reiterated that he believed the rise in inflation will be transitory because there is ample slack in the labor market and supply chains will adapt and become more efficient. The forces that have kept inflation in check – global competition, improvements in technology and just-in-time inventory management – are still present. In addition, the US economy is nowhere near full employment, and inflation has never risen dramatically with the unemployment rate at current levels.
Additionally, last year during the lockdowns many consumers cut back on travel and entertainment spending but boosted their spending on household goods. As the economy reopens, this trend is likely to reverse, which would keep economic growth on a solid but potentially lower trajectory than many anticipate. As a result, the burst of economic activity this year will probably be followed by a long, slow recovery, and inflationary pressures should ease.
The optimism being displayed by many market participants could mean that the most positive view on the economy and corporate profits the rest of this year is already reflected in the level of both bond and stock prices. If the effect of the stimulus is less than is currently expected, the disappointment may induce short-term volatility in the capital markets. At the very least, the path forward for the stock market appears to be much more challenging, while the outlook for bonds may be brighter than the current dire consensus.
The stocks that have led the market have been the large, high growth companies in the Technology and Consumer Discretionary sectors. These stocks generated strong growth even in a pandemic and are leaders in several technological trends which will continue to shape the world’s economy going forward such as robotics, video conferencing, shopping from home, financial services innovation, and cloud computing.
Meanwhile, the earnings of companies in the Energy, Utilities, Financials, Communication Services, and Industrial sectors were depressed during the pandemic, but are going to benefit the most from the recovery in economic activity and are much more reasonably valued than many other sectors.
In a year with so much change, the statement “workforce is the number one need of local businesses” remains the same. It’s true that many local businesses are desperately seeking skilled and qualified workers now. This need will only become greater as local hospitality business expansion returns in force to Palm Beach County. It’s made more complex by a market that is rapidly and constantly changing, consequently employers are seeking workers who can help them now and also upgrade their skills over time.
This program year has been among the most challenging in our county’s history, including its impact on the labor market.
On top of record unemployment arising from the COVID pandemic, we have seen our community’s emotions and fears heighten to a whole new level. But now we are emerging from these times stronger, better and more adaptive – recovering many of the number of jobs lost to COVID.
There have been several improvements in our local employment and economic outlook – the most recent unemployment rate for Palm Beach County (March) fell to 4.7 percent. For the seventh consecutive month, our county’s unemployment rate also fell below those for the state and nation. The continuing decline in the county’s unemployment rate shows that we are approaching pre-pandemic unemployment levels – levels at which many economists consider to be full employment!
But our post-pandemic workforce has changed – permanently in some cases. That’s what our first-ever State of the Workforce report is all about – to provide a comprehensive look at who are residents and employers are, their needs and the challenges they face now and in the future. The report examines topics such as:
- Characteristics of our labor force
- Employment, education and training in the county
- Wages and income
- Top businesses and key industry sectors
- Current and future impact of COVID-19
Find out how your business can rebuild and thrive in this new marketplace. Access the report at: State of the Workforce 2019-2020
CareerSource Palm Beach County has scheduled several virtual job fairs for Spring/Summer 2021 among them include:
- May 19 – Technology/Telecom
- June 23 – Advanced Manufacturing
- July 21 – Protective Services/Security
Don’t miss out on the opportunity to hire the talent you need to help your business rebuild and thrive! There is no cost to participate, but advance registration is required. See our website at www.careersourcepbc.com for more information or contact your Business Services account representative at 561.340.1060.
CareerSource held 12 virtual hiring events since March 2020 to help connect hundreds of job seekers with more than 200 area employers.
We offer the following at no cost to employers:
Job Posting & Recruiting Post open positions on our statewide jobs database, Employ Florida, where people apply to your open positions in whichever means suits your company best. Work with one of our professional recruiters who will actively seek out qualified candidates for your open positions.
Virtual Job Fairs Employers may post one or more open positions in a virtual job fair. Candidates can access your virtual booth where you can screen the candidates and, if interested, go to a one-on-one video interview.
On-the-Job Training Grants OJT's are used to assist the employer in finding and securing employees that may not have all the technical skills required for the position. Employers are reimbursed at least 50% of the wage rate of an OJT participant for the costs of providing the training and additional supervision related to the OJT.
Customized Training For training future employees or recent hires who meet eligibility requirements. CSPBC reimburses the employer 50% of the cost of training for each individual that completes the training and is employed/retained by the employer after the training.
Labor Market Information Data about labor supply and demand, earnings, employment and unemployment statistics, job outlook, and demographics of the labor force.
Incumbent Worker Training Grants Provides grants for continuing education and training of current full-time employees. This program can be helpful when planning a large business expansion or training staff on new technologies to avert downsizing. The program will provide reimbursement grants to businesses that pay for preapproved, direct, training related costs.
In-person Hiring Events CareerSource works with employers on mass hiring events. This no-cost recruiting service allows employers to interview a large number of qualified candidates in one convenient location and time.
Apprenticeships Formal technical instruction combined with paid on-the-job learning. Workers learn practical skills associated with a particular industry and/or employer using a structured program of "Learn While You Earn". Business gains the trained talent they need and the employees earn nationally recognized credentials that attest to the skills they have gained.
CareerSource Palm Beach County is featured in the latest issue of the BDB’s quarterly PBC Business Magazine. Each page features employer testimonials from Chad Decker, COO of Alphazyme and John Naccarelli, CEO of Sky Nurses, LLC.