A worker wears a mask at the Boeing Renton Factory, where 737 MAX airliners are manufactured, as commercial airplane production resumes following a suspension of operations last month in response to the coronavirus pandemic as efforts continue to help slow the spread of the coronavirus disease (COVID-19) in Renton, Washington, April 21, 2020.

Jason Redmond | Reuters

TJ Wilson is no stranger to hunting for jobs.

A consultant based in Los Angeles, Wilson often has a few weeks or months in between contract roles with different cosmetics companies. It’s a cycle he has followed over the past five years, working with different employers for about six months at a time. But when his latest contract ran out in early March, the process no longer followed the same script.

“Typically, when I’m working with recruiters, I get calls two or three times a week about a job,” Wilson said. “And now all those calls have just disappeared.”

Wilson is one of more than 30 million Americans who has filed a new jobless claim since the coronavirus pandemic ground the national economy to a standstill. April saw the most job losses in a single month on record, according to the Labor Department, led by a decline of more than 7.6 million jobs in the business and hospitality sector.

Professional and business services, where Wilson would most likely be categorized, lost more than 2 million jobs.

Nearly 80%, or roughly 18 million, of those who lost jobs in April told the Labor Department that they thought their layoffs were temporary, but as cities and states slowly lift restrictions, it’s not clear how soon or if those jobs will return.

“There will be millions of those 18 million that will be called back to work,” said Luke Tilley, chief economist at Wilmington Trust. “But we think that many more millions of them are likely to end up as an actual job loss.”

Potential bright spots

The official unemployment rate soared to 14.7% in April, and many, including Treasury Sec. Steve Mnuchin, have said they expect it to rise again next month. Goldman Sachs economists said in a note to clients that they expect unemployment in the United States to peak at 25%.

But even if the top-line number gets worse, there could be sector-level information that shows the reopenings or government relief programs are working. Construction, which lost just under 1 million jobs in April, could see a boost in employment as restrictions are lifted for workplaces where physical distancing is easier, Tilley said.

The sector could also see outsized results from the Paycheck Protection Program, Tilley said, because those companies will find it easier to meet the requirement to spend 75% of the loan on payroll costs to turn it into a grant.

“Equipment that they rent, materials that they are bringing in for any specific job, are sort of a variable cost. So construction companies have an easier time going about taking PPP loans, paying their people,” Tilley said.

Goldman Sachs was less bullish on construction’s recovery, but did point to manufacturing as a potential bright spot.

“One lesson we have taken from reopening experiences abroad is that it is easier to make production sites safe than to safely reopen many consumer activities, suggesting that the rebound will be quicker in the manufacturing sector,” the bank said in a note.

Even if those sectors are able to recoup some of their job losses in the coming months, they may still be hampered by a weaker economy overall, said Lowell Taylor, an economics professor at Carnegie Mellon University.

“This is the kind of nightmare scenario with things like construction and manufacturing — that the goals for activities decline,” Taylor said. “Projects that would have been done just get postponed or just put off indefinitely.”

A slow recovery

Wilson said that he is prepared to look for different types of roles to find work again, and workers in other slow recovering sectors may face the same dilemma.

“Leisure and Hospitality is going to remain incredibly challenged. Some of those other sectors, we think it’s going to be challenging for those to come back as well,” Tilley said.

Some of those job losses were in areas that some considered to be close to recession-proof. Dental offices alone shed more than 500,000 jobs in April, as elective medical procedures were banned in many areas to preserve personal protective equipment.

Tilley said he is skeptical non-emergency medical jobs will recover quickly with people nervous about being in close contact with one another.

The slower the return to normal is in those sectors, the more economic activity will be permanently lost, Taylor said.

“That truly can’t last forever. Those jobs would bounce back, you’d think. People still need dental services,” Taylor said. “But how quickly? … How many people are just going to skip their next check up and clean? And that lost revenue will never come back.”

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