Fresno Retirement Consultant Update
Jobs data can be confusing. For example, the New York Federal Reserve reported in May that among businesses active before the pandemic, 35% remain closed, only 3% of service businesses still closed were likely to reopen, and only 4% of workers will be rehired by currently closed small businesses.1
One industry that has experienced the brunt end of the pandemic is food and beverage. Close to half of all restaurant workers were laid off in spring 2020, and the industry remains down 1.8 million jobs from pre-lockdown numbers.2
On the flip side, resort communities and amusement parks say they can’t find enough job applicants to fill summer positions. That’s particularly detrimental now that people are beginning to travel more, at least domestically. Places like Martha’s Vineyard usually hire labor on temporary visas this time of year, but given how poorly the rest of the world is coping with the pandemic, it’s been difficult to recruit from abroad.3
Job numbers are a leading indicator for the economy. Growing consumer demand creates jobs, and more people working generates even higher consumer demand – and a larger tax pool. The job market is expected to continue growing – barring any setbacks by a vaccine-resistant strain of the coronavirus – which should continue to drive the U.S. economic recovery. If you were affected by the virus, perhaps even benefitting by saving more money, we can help shore up your household finances with versatile insurance products offering both protection and income for emergencies and retirement. Contact us to learn more.
While the struggle remains for many small businesses, overall U.S. data continues to build in a positive direction. In May, the U.S. added 559,000 jobs –many going directly to severely affected industries. For example, food and beverage hired 186,000 more workers, the hospitality industry (composed of amusement parks, gambling and recreation) hired 58,000, and hotels picked up 35,000 jobs. With students resuming in-person classes around the country, state and local schools added 103,000 more jobs and private schools brought on 41,000. The health care sector increased by 46,000 jobs while manufacturing, transportation and warehousing sectors grew by 46,000 positions.4
However, the labor story has been quite different with white-collar jobs. Many companies were able to continue operations and full employment during the pandemic by shifting employees to remote work. Now, on the recovery side of the pandemic, many of those businesses are rethinking their traditional staffing model.
A recent poll by consulting firm West Monroe revealed a new hybrid trend that blends both home and onsite work. About half of executives surveyed said they expected to deploy their hybrid plans by the end of the summer.5 Note that remote work doesn’t just benefit employees – it also offers businesses the opportunity to recruit talent from anywhere in the world as opposed to just the local labor pool.
Fresno Retirement Consultant Takeaways
Fresno portfolio advisor– Soutas Financial appreciated these points: The New York Federal Reserve reported in May that among businesses active before the pandemic, 35% remain closed, only 3% of service businesses still closed were likely to reopen, and only 4% of workers will be rehired by currently closed small businesses.1Job numbers are a leading indicator for the economy. Growing consumer demand creates jobs, and more people working generates even higher consumer demand – and a larger tax pool.
Content prepared by Kara Stefan Communications.
1 Juliana Kaplan. Business Insider. May 5, 2021. “Only 4% of laid-off service workers will get their old jobs back, study finds.” https://www.businessinsider.com/laid-off-service-workers-only-4-percent-old-jobs-back-2021-5. Accessed June 4, 2021.
2 Sarah Ewall-Wice. CBS News. May 5, 2021. “Biden touts direct relief for businesses with Restaurant Revitalization Fund.” https://www.cbsnews.com/news/joe-biden-restaurant-revitalization-fund/. Accessed June 4, 2021.
3 Megan Cerullo. CBS News. May 5, 2021. “Resorts and theme parks face worker shortage as they open for summer.” https://www.cbsnews.com/news/seasonal-resorts-face-summer-worker-shortages/. Accessed June 4, 2021.
4 Eli Rosenberg. The Washington Post. June 4, 2021. “U.S. economy adds 559,000 jobs in May, as the recovery shows signs of strength.” https://www.washingtonpost.com/business/2021/06/04/jobs-report-may-unemployment-shortage/. Accessed June 4, 2021.
5 Kathryn Moody. HR Dive. April 21, 2021. “1 in 5 employers already have implemented hybrid work, poll says.” https://www.hrdive.com/news/1-in-5-employers-already-have-implemented-hybrid-work-poll-says/598781/. Accessed June 4, 2021.