The pandemic is still hampering the United States labor market. It threatens the second wave of job cuts, this time among white-collar workers.
According to Bloomberg Economics, close to six million jobs are potentially on the line. That includes higher-paid supervisors in sectors where frontline workers were hit first, such as hotels and restaurants. Moreover, it had some knock on-effects to connected industries such as real estate, professional services, and finance.
Yelena Shulyatyeva is a senior United States economist at Bloomberg Economics. She said that it would get worse before it gets any better. Unfortunately, the white-collar workers will bear the brunt of pressure for now. She said that this is because markets tend to lag in activity in the economy.
The details and extent of the spillover of job cuts will start to begin to reveal themselves on Friday. This is the day when the government will release the unemployment report for May. The rate of unemployment most likely soared to 19.5%. This is the highest percentage since the Great Depression.
Nonfarm payrolls are projected to drop by another 8 million afterward. April record a decline of 20.5 million. On Wednesday, figures from ADP showed that, in May, private payrolls declined by 2.76 million. Thus, it suggests that Friday’s decline can be smaller than forecast.
Shulyatyeva and colleagues looked, for their analysis, at job losses in March and April. The affected industries were dominated by production workers, blue-collar, and hospitality. They also determined how those layoffs would affect supervisory positions. This is because cuts for management tend to lag behind the workers on the frontline.
The United States
After this, the economists took data from the government on relations between industries. They did this to compute which ones were most reliant on the demand from the most-hit sectors. They extrapolated this to find other jobs at risk, combining that information with the hit to employment in the most affected areas. Most of these were white-collar, higher-skilled roles.
Since mid-March, there were more than 40 million applications for jobless benefits under regular programs of the state. Nevertheless, despite parts of the economy stirring back to life, lay-offs continue to roll on. Amid protests and massive police response in several cities, that is something that could be a challenge.
Analysis by Bloomberg Economics underscored how the financial pain extends beyond restaurant industries, leisure, and travel, and retail. Those impacted directly by the shutdowns.
Thus, lay-offs will remain concentrated in those industries that are currently bearing the brunt of the coronavirus-related lockdowns. Meanwhile, other sectors show signs of worry as they escalate job losses. Alexander Lin is a Bank of America senior United States economist. He analyzed the data of weekly jobless-claims, by industry.
Lin said that, in some industries, such as scientific and financial services, you can see claims actually begin to trend or pick up sideways. Businesses still operate in an uncertain environment. Moreover, they are adjusting to this new reality. The new truth is that you might not need as many workers.
Thus, that means that others can see a similar fate as Mathew Pashby. He is 23 years old, and he graduated from college a year ago. Last month, he lost his job as an account manager at a digital marketing agency in New Orleans.
- Trading Instrument