Hiring is up, layoffs ease as business is restarted
But economist warns: ‘We’re not out of the woods’
Even as COVID-19-related layoffs remain at historically bleak levels, another trend is quietly taking root: Businesses are starting to hire again.
All 50 states have begun allowing nonessential businesses to reopen in phases, prompting restaurants, shops, hair salons and others to rehire at least some of the employees they laid off or furloughed to stem the spread of the coronavirus. Many small businesses received federal loans that are forgivable as long as they retain or rehire staffers.
Job postings in those and other industries are also picking up, underscoring that firms seek to tap a broader pool of workers, including the roughly 30 million Americans who are unemployed. Hiring in fields that have benefited from the pandemic is surging.
The economy unexpectedly added 2.5 million jobs in May as employers rehired laid-off workers, the Labor Department reported Friday. Eight million payroll losses were expected. Although 9.3 million workers lost jobs last month, 13.1 million went back to work, according to an analysis of Labor Department data by Morgan Stanley.
The unemployment rate fell to 13.3% from 14.7%
A reality check: Overall hiring of new employees is still depressed. Total job postings on Glassdoor fell 5% in May, but that followed a 30% plunge in April from early March.
“We have signs of stabilization, but we’re not out of the woods yet,” said Glassdoor Senior Economist Daniel Zhao.
Still, “we’re seeing companies now get more focused on the future,” said Paul McDonald, senior executive director at staffing firm Robert Half International.
Another sign hiring is bubbling back to life is that the number of Americans receiving unemployment benefits totaled 21.5 million the week ending May 23, up from the prior week but down from 25 million earlier in the month, the Labor Department said Thursday.
Some employers haven’t been able to bring back the employees they laid off. Some workers may have landed new jobs while others earn more from unemployment checks – which are juiced by a $600 weekly federal supplement during the crisis – than they would from their normal wages.
In May, job postings on Glassdoor increased 6% for restaurants and bars, 3% for beauty and
Ford is also expected to delay the rollout of the highly anticipated return of the Ford Bronco SUV, which was set to begin production in December but now won't start until February.
Other high-profile delays of production, according to LMC, include:
❚ Nissan Frontier: from April 2020 to April 2021.
❚ Acura MDX: from May to October. ❚ Ford Mustang Mach-E: from July to September.
❚ Toyota Sienna 500B: September. from July to
❚ Cadillac Escalade: from July to August.
Cancellations are unlikely, if only because much of the investment in the redesign and production setup has already been allocated.
“They were just too far along to cancel,” Schuster said.
Still, while automakers may not abandon redesigned or brand-new vehicles that were in the works, they may decide to eliminate existing models that aren’t selling well to make room for the newcomers amid a sluggish sales environment.
They’ve been eliminating poorly selling models in droves in recent years with the cancellation of vehicles like the Chevrolet Cruze, Ford Focus and the Fiat 500.
“I do think there’s going to be further trimming of product lines,” said Michelle Krebs, an analyst for car-buying site Autotrader.
As of late May, about 10% of vehicles on dealer lots were still 2019 models, according to car research site Edmunds.
To be sure, dealers aren’t being flooded with vehicle inventory. Production shutdowns during the height of COVID-19 have prevented that from happening.
But that means “there just won’t be as many 2020 model years out there” as there usually would be for the current model year, Edmunds analyst Jessica Caldwell said.
Production shutdowns aren’t the