What the Latest Jobs Report Could Mean for Your Finances
- The monthly jobs report shows how many news jobs were created by the US economy the previous month.
- The jobs report also shows the current unemployment rate.
- Jobs reports can cue employees to prepare for possible work interruption or to look for better opportunities in other industries.
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There are a lot of reports in the news about large-scale financial issues like the economy, the stock market, unemployment, and tax breaks. But how should individuals and families use this information to plan for their financial futures, especially during these uncertain times? To help dig into that question and learn more about how the pandemic can effect working Americans, let’s take a look at what the latest jobs report might tell us about where the economy seems to be headed, and what that might mean for you.
September 2020 jobs report
On October 2, the U.S. Bureau of Labor Statistics released employment numbers for the month of September 2020, reporting that 12.6 million people were unemployed in September, a decrease of 661,000 since August. Here are a few of the key takeaways:
We’re halfway there, but recovery is slowing
The unemployment rate in September declined to 7.9%. To put that in context, the unemployment rate in January 2020 was 3.6% and rose to a record high of 14.7% in April 2020. So the U.S. economy has recovered more than half of the jobs that were lost due to the coronavirus lockdowns, but unemployment is still significantly higher than the January low, with another 4.3% decrease in joblessness needed to get back to previous levels.
Millions who lost their jobs in the spring are now employed
The biggest employment gains were among people who were unemployed for 15-26 weeks (about 4-6 months), which would be in the March-May range.
In other words, many of the people who lost their jobs in March-May may now be those employed once again, possibly reflecting the reopening of businesses that have been shuttered since the lockdown began.
|Increase or decrease
|Less than 5 weeks
|5 to 14 weeks
|15 to 26 weeks
|↓ 1.6 million
|27 weeks or more
|↓ 661,000 net*
|__12.6 million __
*The total of the numbers in this column is 950,000, but since the total net change was reported as 661,000, we can assume that 289,00 of the 950,000 are the same people who just moved from one group to another, e.g., someone who had been unemployed for 4 weeks in August would be reported in the “less than 5 weeks” group in August but in September would be in the “5-14 weeks” group.
This re-employment is also reflected by the decrease in the number of people who wanted full-time employment, but were working part-time due to slow business conditions. The number of those involuntary part-time workers went down by 1.3 million to 6.3 million. However, that’s still 2 million higher than in February.
But it’s still a tough job market out there
The number of people who have been unemployed for more than 26 weeks increased by 781,000, suggesting that those who lost their jobs before the pandemic may be having an even tougher time finding a job in the current environment.
Job gains are primarily in sectors that are reopening
Most of the increases in employment last month came from the hospitality and retail sectors, as businesses in those industries started opening back up. Leisure and hospitality added 318,000 jobs and retail added 142,400 jobs. However, with coronavirus still a very real threat, it’s unlikely those areas will make a full recovery soon. A McKinsey & Co report predicts that it could take until 2023 for the hospitality sector to reach pre-COVID levels.
Employment in health care and social assistance increased
As the pandemic continues, it’s probably not surprising that health care employment increased. In September alone, health care and social assistance employment went up by 107,700. While this sector may present job opportunities, it comes with the health risks of working in person and potentially being exposed to COVID-19.
Professional and business services employment grew
Professional and business services jobs, which includes professions such as engineers, attorneys, and consultants, added 89,000 jobs in September. When the lockdowns happened in the spring, many companies froze hiring while they scrambled to deal with the pandemic’s impact on their businesses.
If you’re trained in these areas, now may be a good time to ramp up your job search, especially since it’s an option that often allows for remote work.
Government employment decreased
While most sectors had at least some employment gains in September, the government sector lost 216,000 jobs. While the loss of temporary census jobs accounted for 41,000 jobs, most of the government job losses came from layoffs at public state universities and local K-12 schools.
It’s helpful to understand the broad picture, but if you are interested in more information on the job numbers in your area, check out this interactive employment rate map.
How COVID-19 could affect your job search
Most epidemiologists agree that the coronavirus is not going away anytime soon. How long it remains a problem affecting the economy depends in large part on how governments and individuals respond to the virus. The good news is that steps like wearing masks, washing hands, and social distancing can help reduce the severity of flare-ups. So while the opening of businesses is good for employment now, it is unclear how outbreaks of COVID-19 will effect closings, layoffs, or work from home in the future.
Three ways to rethink your job in times of uncertainty
With the future so uncertain, optimizing for safety should be at the top of your list of priorities. However, that doesn’t necessarily mean you have to wait for things to get better, let alone “normal”. You’ll want to take proactive steps to protect against uncertainty in the employment market to protect your source of income. Even if you’re currently employed, here are some ideas to explore:
1. Look for a job in a more stable industry
If your job is in a sector that has been hit hard by COVID, consider moving to a business that continues to do well in the post-COVID area, even if you’re back to your full-time job. With so much uncertainty about the virus, it’s valuable to have a job that remains steadier through the ups and downs of the pandemic. Some online research may help you discover:
What are the trends for your industry? How hard has it been hit? Is it recovering quickly, or are experts predicting more layoffs?
What are the employment trends for your state? What industries are hiring and which are issuing layoffs?
What jobs in your industry or profession can be done from home instead of the office? Has the pandemic opened up opportunities for you to pursue a job with companies in other cities (or even other states), while working from home?
If you’re unemployed, try not to get discouraged or give up your job hunt. It’s still not clear if there will be another round of supplemental unemployment assistance, and some states still haven’t paid out the money that was promised back in August.
2. Get retrained for a “safer” job
There are two types of safety you may want to optimize for:
Employment safety. If your research indicates that your job or industry isn’t very stable, then you may want to consider getting trained for a different job. With virtual learning more accessible than ever, this may be easier and more affordable than you think. Look online for training programs or courses from a community college in the job sector you’re interested in.
Physical safety from exposure to the virus. Having a work-from-home job allows you to limit your exposure to the coronavirus, and companies are more open to this option than ever before. Work from home can also expand your job options, as companies who never hired outside their geographic area before, are starting to do so now.
3. Consider a gig-based job, or work for yourself
If changing industries or retraining for a new job doesn’t work for you right now, then self-employment might be an alternative. Even if you’re employed now, you can start a side gig to test the waters. One other alternative is to start your own venture. However, there’s a lot to learn about running your own business, so talk to people who are already doing it before you commit to being your own boss.
Bottom line: Although the jobs report shows that employment is stronger than it was in the spring, the situation is still very unstable, so don’t let up on your search to find employment that’s less likely to be affected by new outbreaks of the virus, and which can help you protect the safety of you and your family.
How to manage debt if money is tight
If your job situation caused you to go into debt, you’ll want to start making a plan now to keep it from snowballing out of control. Check out our free How to Manage Debt Guide to understand your options. The sooner you take control of your debt, the sooner you’ll be able to start saving up again and better protect against future uncertainty in the job market.
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