U.S. Employment Updates

BY Brian Loftus
1/28/2021 - HVAC Market Intelligence

HARDInomics Overview - January 2021

 

Jobs declined by 140K during December 2020 according to the U.S. Bureau of Labor Statistics’ latest Employment Situation report. This was consistent with the 123K decline in ADP’s December jobs report that was released earlier the same week. A bright spot in the Employment Situation release was the jobs estimate for October was increased by 44K and the November estimate was increased by 91K. The direction of adjustments can be as important as the headline number in understanding employment trends, and these are substantial positive adjustments. This item is the national perspective. What matters more is the activity in your state and understanding the underlying estimates.

Picture6-4

 

The unemployment rate is the number of unemployed persons divided by the estimated size of the civilian labor force. The labor force includes those who are fortunate enough to be employed, the unemployed (able, available, and actively seeking work), and those who are out of the labor force and not looking for work. Unemployed can also include someone entering the labor market and looking for work. This means the unemployment rate can decline, with no change to the number of people employed, if the estimated size of the labor force is reduced. Through Demand Per Location projects we have seen that changes to the estimated size of the labor force are a good leading indicator of HARDI members’ sales. Think of the estimated size of the labor force as the depth of your potential customer pool. Thirty-eight states have fewer potential customers than they did before the COVID-19 recession. The median reduction across all 50 states is the civilian labor force or potential customers for HARDI members has been trimmed by -2.5% from the beginning of 2020.

Enhanced level HARDI members and distributors who participate in the monthly sales survey TRENDS will receive the quarterly HARDInomics next week. The quarterly features seven regional reports. Each regional has comments on four growth characteristics per state, including a review of the trends of 10 job categories per state, and four charts per state analyzing their employment data and weekly unemployment claims. This will provide you with some insight into the quality of your 2021 customer pool.

There was no change to the 10.7 million estimated number of our friends and neighbors who remain unemployed nationally, or to the 6.7% national unemployment rate. The estimated number of long-term unemployed, which is 27 weeks or more, remained steady at 4 million, while those unemployed for fewer than five weeks increased by 450K to 2.9 million. The next jobs report in early February will include some annual revisions that could make it difficult to interpret. A benefit of TRENDS participation and Enhanced membership levels is assistance deciphering this report and others to understand the implications for a 2021 that we expect to improve as the year progresses.


This article was featured in our monthly Data Driven Newsletter. If you would like to receive these monthly emails, click here to sign up.

If you have any questions, or would like to suggest a featured topic for next month's DDN, contact Brian Loftus at bloftus@hardinet.org.