This year job postings are 7 percent lower. And it will probably get much worse.
Although warehouse and health care jobs have grown, it has not been sufficient to counter the declines in entertainment and tourism jobs.
As businesses close across the country - due to either voluntary actions, slow business, or government mandates - in order to prevent the novel coronavirus from spreading further, numerous Americans are out of work or have lost their jobs. Once this crisis is over, they might find themselves having to look for a job in an economy that is completely different. A shift has already been signaled in new data regarding which sectors are hiring and which ones are not.
This month, unemployment claims have skyrocketed all over the country, with more to definitely follow. The US Private Sector Job Quality Index, which is a project undertaken by Cornell University Law School and others, estimates that around 37 million jobs may be lost over the short term. Most are low wage jobs and concentrated in such sectors as accommodation and support services, retail, and food service.
In the US, we are still within the early phase of the coronavirus pandemic, and only in retrospect will we know the full and true extent of the economic damage. However, every day, there is new data coming in that makes the situation look bleak.
Indeed, the largest hiring platform in the US in terms of traffic, job posting had already gone down by 7 percent from January 1 through March 21, 2000 compared to this same time frame in 2019. The fall-off in job postings this year has been quite drastic compared to 2018 and 2019.
Although the entire employment story in an economy cannot be told by job postings alone, they are a fairly good proxy when it comes to job prospect and a reduction in job posting often precedes measures that are more drastic such as layoffs, which are being seen already in unemployment claims and other related indicators.
According to senior fellow Mark Muro, at the Metropolitan Policy Program at the Brookings Institution, posting a job is an indication of what managers' sense about the prospects of business for the future. What we are seeing now is basically a vote of no confidence.
He also added that the US job market will likely get a lot worse.
Muro said that the data covers a time period where the storm from a distance got closer and start enveloping the outside of town. Most likely, there will be an even steeper decline in job postings in the future.
In fact, measures for combating the spread of Covid-19 have intensified since March 14. In California, the most populous state in the country, all 40 million residents have been ordered to stay at home starting on March 19. Then there were similar orders that went into effect three days later for New York's nearly 20 million residents. Many other states and cities have issued their own mandates for sheltering-in-place. This has resulted in empty businesses and empty streets, which many companies consider layoffs rather than hiring new employees.
In countries such as the UK and Italy, where the coronavirus has spread for a longer period of time, job postings have declined by a rate in the high teens. Indeed, which has around 25 million global job postings, reports that job posts have gone down by 14.8 percent in the UK, by 15 percent in Australia, by 17.7 percent in Ireland, and 18.2 percent in Italy.
According to chief economist Jed Kolko from the Indeed Hiring Lab, higher job listings from other countries is a reflection of the progress of coronavirus, the nature of the government's monetary and fiscal responses, and the nature of shelter in place, the lockdown, and other regulations that have stopped or curtailed economic activity. He is expecting that the US could be in a similar situation soon.
The US economy, in general, has taken a substantial hit already. Earlier in the month, there was the worst daily decline of the Dow Jones Industrial Average, which measures the overall health of the economy and major corporation's stock performance, since 1987. Following the longest market expansion period in history, financial experts now believe that the world economy is headed into a recession.
All of this is going to cause significant problems for the economy and housing marketing in particular. Sales are falling as massive unemployment derails price growth even though mortgage rates have never been lower. According to Kris Lippi of Isoldmyhouse.com selling houses will be harder as even though mortgage rates remain low, rising unemployment puts buyers off.
Some Bright News
As the food-service industry has been devastated by restaurant closures and the travel and airline industries have been pummelled by travel advisories and restricted flights, employment does have a couple of bright spots. Indeed data shows that stocking and loading jobs in warehouses and health care positions have increased this year. To meet demand, Amazon is hiring 100,000 new warehouse employees.
The long-term result might mean a change in the composition of jobs in the US as those who are unable to work in a certain field end up taking jobs wherever they are available. That will most likely mean moving away from arts and entertainment as well as tourism and hospitality to jobs like health care or loading and stocking depending on the person's skills.
Considering that the overall U.S. job postings are 7 percent lower, the rise in stocking, loading and healthcare jobs is not sufficient to compensate for all the losses in other sectors.