US ECONOMY PICKS UP SOME STEAM BUT REMAINS FAR BELOW PRE-PANDEMIC LEVELS

Sep 14, 2020

While the US economy appears to have picked up some steam, activity remains far below pre-pandemic levels, according to the latest Federal Reserve Beige Book report released this month.

“Economic activity increased among most districts, but gains were generally modest and activity remained well below levels prior to the Covid-19 pandemic,” according to the report. “Continued uncertainty and volatility related to the pandemic, and its negative effect on consumer and business activity, was a theme echoed across the country.”

The jobs picture was mixed, according to the report. Employment increased overall, although growth appeared to slow. There were rising instances of furloughed workers being laid off permanently while there were also indications companies still found it difficult to find necessary labor.

The Boston Federal Reserve District found some staffing firms reporting that hazard pay had been eliminated and some staffing buyers raised pay compared to pre-pandemic levels to bolster recruiting efforts.

Overall, the Boston district noted staffing firms have mixed results based on industries they serve with healthcare staffing firms, in particular, seeing growth.

“Some [staffing] client organizations called back temporary workers whose jobs could not be done remotely; some moved from entirely virtual hiring to conducting the last round of interviews on-site,” according to the Boston district.

It also noted that some staffing firms reported workers were reluctant to return to work, especially at pay rates that might be lower than unemployment benefits. Lack of access to childcare was also another factor inhibiting labor.

Still, “the majority of [staffing] contacts were somewhat more optimistic than three months ago, but a few were less optimistic and expected business activity to slow in Q3 and Q4,” according to the Boston district.

The Philadelphia Federal Reserve District noted staffing firms reported business activity down by as much as 30% below pre-pandemic levels.

However, the district also noted staffing firms reported more orders than they could fill with available labor and they were worried a lack of childcare could sideline some workers.

The Minneapolis Federal Reserve District also noted that staffing firms reported increases in unfilled job orders.

Source: Staffing Industry Analysts

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