Labor market trend numbers for the Tri-Cities labor market are showing softening even before the COVID-19 gut punch that will begin showing up in the April reports.
The annual revision of the Bureau of Labor Statistics’ payroll report delivered in the January and February reports show the Tri-Cities had a net loss of 300 jobs in 2019 instead of a net gain of 500. It also revised the 2018 net gain of 550 to 500. The revision puts 2019’s total jobs below the pre-recession benchmark by a little over 1,000 jobs.
Preliminary, non-adjusted data shows the jobs, employment, and labor force trend moving average declining. Both reports are lagging indicators that reflect labor market conditions before the COVID-19 health emergency starts to take an unprecedented toll on the economy.
An indicator of what March’s local labor market will look like can be seen in the region’s 5,763% increase in new unemployment claims. Chris Cannon told the Johnson City Press there were 81 claims during the week of March 14 and 4,749 at the end of March. Cannon is the state Department of Labor’s spokesman. The NE Tenn. area the unemployment claims cover comprises Hancock, Hawkins, Greene, Sullivan, Washington, Unicoi, Carter and Johnson counties.
March’s local jobs and employment reports will be available in late April. The April report will be available in late May.
The raw preliminary, non-adjusted numbers show a gain of 600 jobs from the January total. But that’s a month-over-month number. The moving average trend is a better indicator of what happened during the revision. That revision showed the job growth rate trend began softening September last year. The year-over-year comparison went negative in November.
The Tri-Cities added a little over 9,000 jobs between 2011 and 2019. It lost 10,200 jobs during the Great Recession.
Preliminary employment numbers for February showed a gain of 463 from January and an increase in the labor force of 337 people. The moving average trend for both peaked in December and arched lower in January and February. Normal seasonal employment and labor force ebbs account for much of the January and February softening.
The region’s February unemployment rate was unchanged from January’s 4.2%. It will likely increase in March then begin a steeper increase in April.
The region’s Leisure and Hospitality sector will take the biggest initial hit. February’s total for that sector was 2,200 jobs – 10.9% of the region’s jobs total. The retail sector will also be an early indicator, but some of that loss will be absorbed by heavy hiring by grocers and big box stores in their effort to keep up with increased consumer buying. At the end of February, there were 26,000 jobs in the region’s retail sector. It accounts for 12.8% of the jobs total in the seven-county Tri-Cities region.
Since this recession is squarely focused on consumers and consumer spending accounts for about 70% of the total economy, the effect will be brutal. Market watchers think consumer spending will decline by 30% in the second quarter. Some components – like groceries and home health care – will see increases, but it won’t be enough to blunt the decline.
The conservative estimate is unemployment will shoot up to 12% or higher, which would be the worst level since 1940. Others think unemployment will be closer to 20%.
Most economists expect a strong recovery if COVID-19 is contained and if quarantines are relaxed. Experts also predict a second wave of infections if a return-to-normal attempt comes too soon.
Categories: LABOR MARKET