Labor Market Report for September 4th, 2020

Every week, we will be publishing labor market industry (LMI) data and important trends to consider in the development of an equitable economic recovery from the COVID-19 crisis. We are always looking for opportunities to learn, grow, and collaborate. Email [email protected] to learn more.

As August turns to September, we've now hit six months since the COVID-19 pandemic began to affect the labor market in Philadelphia. Back in late February, it was impossible to imagine what was coming. At the time, unemployment was relatively low, wages were rising, and there were record numbers of jobs being posted. It was not until March 11th that a global pandemic was declared. Over the next few weeks, everything changed, giving way to the last six months of uncertainty, record unemployment, extended furloughs, and the shutdown of whole industries. This week we're taking stock of where we’ve been, where we are today, and some trends that may or may not play out in the coming months.  

Job postings can serve as a leading indicator of economic activity. When a business is anticipating future demand, they look to hire new talent that can perform work to fulfill that demand. While indicators such as unemployment or payroll records reflect who is currently working (or not), job postings can shed some light on where the economy is headed in the short term. A spike in unemployment is an effect of a decline in economic activity, while a decline in job postings is a decline in optimism. There are of course exceptions, but this distinction is helpful to keep in mind when interpreting jobs numbers.  

Last week, there were around 4,500 jobs posted in the city of Philadelphia, around 35% less than the average of jobs being posted each week in mid-February. However, 4,500 is nearly double the number of jobs posted back in the second week of May. That week, only 3,000 jobs were posted in the entire city, 57% less than before the pandemic started. We take this to indicate a higher level of optimism today than there was a few months ago. 

This optimism is not shared across all industries, however. Unsurprisingly, the hospitality industry is still posting only 1/3rd of the number of jobs that were being posted back in February. On the other hand, the retail sector continues to be the only industry looking for more talent than they were in February, with job postings in the city up 45%, and a whopping 244% in the metro area. While Amazon and other big box and online retailers are continuing to drive much of this growth, it points to optimism that people will continue to make purchases of consumer goods. Postings in transportation have also bounced back to levels close to pre-pandemic, driven mostly by occupations involved in transporting those consumer goods. The manufacturing, health care, and professional services industries have also seen a steady increase in postings over the last few months, although all are still below pre-pandemic levels.  

There are, of course, several things that could derail the gains made in those industries. An increase in cases or new outbreaks associated with school re-openings could cause increased restrictions on elective procedures at hospitals and the capacity at manufacturing facilities. Families running low on support may be forced to reduce spending further without additional benefits. Cold weather may reduce interest in outdoor dining, causing even more decline in the hospitality industry.  

Once a vaccine for Covid-19 is widely available, it will still take time for economic activity to pick back up. In a recent piece for The Philadelphia Citizen, noted urban thinkers Bruce Katz and Richard Florida outline seven pillars for rebuilding a more equitable Philadelphia. Their second pillar is a call to upgrade workforce skills, arguing, "the pandemic makes it clear that more Philadelphians must be prepared to do higher-skill, higher paying jobs. This presents a prime opportunity to upskill the workforce." They go on to site our work through the Skills Initiative as a model worth scaling.  

We agree. For those of us working in economic and workforce development, it will be important to look at leading indicators like job postings to understand where growth might be picking up. Many workers will need to make big shifts in the type of work they do, as some jobs decline, others evolve, and new positions are created. Armed with that knowledge, workforce organizations will need to focus efforts on helping people make those needed adjustments as they seek new opportunities. The workforce development industry certainly looks poised to have plenty of demand in the years to come.  

About the data: Data is sourced from Burning Glass Technologies Labor Insights, unless otherwise noted, covering job postings in the City of Philadelphia and the Philadelphia Metro Statistical Area (MSA), which is comprised of roughly a circle surrounding Trenton, Philadelphia, King of Prussia, Camden, and Wilmington. This data is then compared to a benchmark week of February 9th – 15th, which was the last week before the economic impact of COVID-19 began to be reflected in job posting data.