MNI INTERVIEW: US October Job Openings Up Despite Virus Surge

Employment isn't likely to drop to the record lows seen when the U.S. was battling its first wave of Covid-19 even as caseloads surged to fresh highs across the country in October, Julia Pollak, a labor economist at online job marketplace ZipRecruiter, told MNI, citing steadily rising job postings over the past weeks.

The labor market recovery could still stall as the virus moves from more densely populated areas to areas that were relatively unscathed earlier in the pandemic, Pollak said.

The average daily count of available jobs on ZipRecruiter rose to 10.7 million in the latter half of the month, "within striking distance" of February's pre-pandemic peak of 11.4 million, Pollak said.

That "somewhat surprising and remarkable" increase reflects a surge in seasonal hires as businesses ramp up operations ahead of the holiday shopping season, she said, though seasonal job openings are still down roughly 9% from last year.

No Declines in New Hotspots

Northern and Midwestern states that saw spikes in new Covid-19 infections and hospitalizations through October haven't yet seen a decline in job postings or employment, Pollak said, but that should change in the coming weeks as consumers start to shy away from services as the perceived risk of exposure increases.

That said, states and metro areas on the frontlines of the nation's third wave of Covid-19 won't initiate the same lockdowns that triggered an economic standstill in places like New York City and Seattle, where the novel coronavirus first spread in the U.S.

States currently battling the latest surge in Covid-19 case counts also tend to lean Republican, unlike the more Democratic states and cities engaged in the first wave, Pollak said, which should also influence a divergent policy response.

"Now that we know more, states are able to choose more targeted interventions that are better at reducing the spread, but at a lower cost to the economy," she said. "Both because of the benefit of hindsight and the ability to learn from the states that were hit first and take a targeted approach and because there's a philosophical, political difference, we're unlikely to see the same measures."

"We'll see a smaller decline in employment for those reasons," she added.

Nowhere to Go

Pollak estimates the jobs recovery will take roughly seven years and could be more drawn out as "pandemic refugees" aren't able to flee crowded cities, where infection rates are also on the rise, to suburbs or rural areas this time around.

"One great thing about a country as big as America is you can leave the place where the hurricane is and go somewhere else," she said. "Now those places that had the smallest declines in employment are hotspots, so they could place a drag on the economy and on the recovery, whereas before they were sort of helping soften the blow."

Nearly 16 million Americans changed their residence between February and July, according to change-of-address data from the U.S. Postal Service, and roughly one-fifth of adults have indicated that they moved or know someone who did as a direct result of Covid-19, according to a July report from the Pew Research Center, a nonpartisan Washington-based think tank.

"When you look at the fall in employment, a massive 9% to 10% decline in places like Manhattan and San Francisco, it's not just because of job loss, it's also because people are leaving and moving," Pollak said. "When you see a tiny decline in Iowa of around 2.3%, that's not just people not getting laid off, but also people moving in."