This quarter one update will address the impact of the coronavirus pandemic on jobs, Central Florida’s specific exposure to the economic downturn, and cover indicators to consider in response efforts as well as those to watch for signals of recovery in quarter two.
Impact – Jobs
The full extent of the impact of coronavirus on the job market will not appear in government data sources for some time. The monthly jobs report to be released on April 17 by the Florida Department of Economic Opportunity will include preliminary March numbers for Florida and Orlando, but this will be too early to discern the full impacts of expected job losses.
The national job report was released on Friday, April 3, showing impacts from the first two weeks of March, before many of the layoffs occurred. Those numbers are expected to appear in next month’s data. This preliminary report for the nation showed an increase of the unemployment rate by 0.9 percentage points to 4.4 percent and employment losses of 701,000, marking the end of nine and half years of consistent job growth for the nation.
The most recent jobs data for Q1 in Orlando showed that Construction, Education and Health Services and Financial Activities were the fastest growing industries in February, with employment growing at 6.1, 5.1, and 4.4 percent respectively. Professional and Business Services and Leisure and Hospitality, two of the industries expected to be hit the hardest by COVID-19 related layoffs, grew more moderately by 1.3 and 2.5 percent year-over-year.
These trends will likely be drastically changed given the data that is currently available on weekly claims for unemployment insurance. In the week ending March 28, the number of initial claims for unemployment insurance spiked to more than 6.6 million across the U.S. This topples the record number of 3.3 million claims seen in the previous week and “marks the highest level of seasonally adjusted initial claims in the history of the series.” Find the weekly news release from the Department of Labor here.
The report notes that Florida saw 227,000 initial claims filed in the same week (ending March 28), an increase of 205 percent from the previous week. In the state supplied comment section for states with an increase of 1,000 or more initial claims (unadjusted), Florida reporters noted there were “layoffs in the service, retail trade, manufacturing, wholesale trade, construction and agriculture, forestry, fishing and hunting industries.”
Real-time job posting data provides further insight on the positions expected to be most impacted by layoffs and where there is increasing opportunity. Data from job postings in the Orlando metropolitan statistical area (MSA), which is comprised of Lake, Orange, Osceola and Seminole Counties, showed that jobs with the greatest decrease in the number of unique postings over the last 30 days were post-secondary teachers, waiters and waitresses, lawyers and judicial clerks, and supervisors of production workers. Jobs that have seen an increase in postings in the last 30 days include licensed nurses, securities, commodities and financial services sales agents, construction managers and industrial engineers. View the table below to see the 10 fastest growing and declining occupation postings over the last 30 days.
|Most Recent 30-Day Job Posting Change – Orlando FL|
|Standard Occupation Code||Occupation Title||Last 30 Days Unique Postings||Last 30 Days % Change (from previous 30 days)|
|29-2060||Licensed Practical and Licensed Vocational Nurses||480||+10.6%|
|41-3030||Securities, Commodities, and Financial Services Sales Agents||354||+8.9%|
|17-2110||Industrial Engineers, Including Health and Safety||453||+4.4%|
|17-2070||Electrical and Electronics Engineers||491||+1.7%|
|43-5080||Stock Clerks and Order Fillers||963||+1.6%|
|13-2050||Financial Analysts and Advisors||351||+1.4%|
|31-1010||Nursing, Psychiatric, and Home Health Aides||717||+0.8%|
|53-7060||Laborers and Material Movers, Hand||401||+0.3%|
|35-1010||Supervisors of Food Preparation and Serving Workers||1,063||-13.8%|
|33-9030||Security Guards and Gaming Surveillance Officers||473||-14.2%|
|31-9090||Miscellaneous Healthcare Support Occupations||753||-14.5%|
|43-4080||Bookkeeping, Accounting, and Auditing Clerks||559||-14.7%|
|43-4080||Hotel, Motel, and Resort Desk Clerks||352||-14.8%|
|51-1010||First-line Supervisors of Production and Operating Workers||350||-14.8%|
|23-1010||Lawyers and Judicial Law Clerks||318||-16.1%|
|35-3030||Waiters and Waitresses||460||-17.6%|
Economic Impact – Central Florida’s Exposure
As Dr. Dale A. Brill, Partnership senior vice president of Research and the Foundation for Orlando’s Future, notes in his regional update on the economic impacts of COVID-19 released on March 18, “the size and persistence of the economic impact is unknowable.” But the global scope of this pandemic and Florida’s dependence on consumer spending certainly means that Central Florida will feel the impacts of this virus even after social distancing measures subside. Two recent reports further this stance.
The Conference Board Consumer Confidence Index is a leading indicator of consumer spending, giving a glimpse into how consumers are feeling about the current and short-term economic outlook. The index declined sharply in March, down to 120.0 from 132.6 in February (1985=100). According to Lynn Franco, senior director of Economic Indicators at the Conference Board, “March’s decline in confidence is more in line with a severe contraction – rather than a temporary shock – and further declines are sure to follow.”
A March 16 report, produced by Oxford Economics, predicts that the travel industry will see a 31 percent decline in travel related economic impacts for the year and that the U.S. economy is projected to lose 4.6 million jobs as a result of travel declines in 2020. Travel related job losses, by Oxford Economics’ projections, will push the unemployment rate to 6.3 percent alone.
With at least 63.2 percent of Orlando’s economic activity dependent on consumer spending—41.8 percent tourism and recreation and 21.4 percent consumer nondurables—any long-term decreases in travel and consumer spending during 2020 will greatly impact the regional economy. In short, when consumers feel wary about the future, they are less likely to spend on travel, leisure or large household items.
Indicators to Watch
Goldman Sachs recently revised their estimates for the U.S. economy, stating that the economy will shrink 34 percent in the second quarter and unemployment could be as high as 15 percent by mid-year. But these same forecasts project a rebound of 19 percent in the third quarter meaning the estimates show “that a bit more than half of the near-term output decline is made up by year-end.”
Overall, analysts are unsure how the economic impact of this pandemic will play out over the next few months. It is possible that we see a deep V in the data as economic activity falls and then rebounds once social distancing policies are lifted and people return to their daily lives. However, concerns about a second wave of the virus cropping up in China suggest that the U.S. may have to find a “new normal” in terms of economic activity and pivoting to online and virtual work.
Metrics to consider when planning response efforts include understanding regional poverty, language barriers, health risks based on demographics, etc. An overview of the data tools currently available from the Partnership for the seven-county Central Florida region to identify vulnerable populations can be found here. Consistent data is important for understanding where this pandemic is likely to hit hardest. One consequent issue being brought into the spotlight as all schooling turns virtual is the number of households with a reliable Internet connection. By U.S. Census Bureau estimates, 33 percent of the households in Central Florida do not have a wired broadband connection. Assuming every household in the region has a reliable Internet connection would leave these households behind as schools transition to online teaching and adults search for new jobs or opportunities to up-skill.
High frequency indicators to watch in quarter two and three for signs of economic recovery include:
- The number of new cases of coronavirus reported in the U.S.
- Weekly Unemployment Claims from the Department of Labor
- The Consumer Confidence Index from the Conference Board
- Weekly box office sales and hotel vacancy rates
The last month of quarter one felt like a year unto itself, with much of March consumed by the gradual shut-down of the American economy in a response to slow the spread of the novel coronavirus. While the economic situation in America rapidly changed in the last three weeks, it is worth noting that this global pandemic has played out swiftly and entirely in quarter one of 2020. The first case of COVID-19 was reported to the World Health Organization (WHO) China Country Office on December 31, 2019 and the first U.S. case was confirmed by the Center of Disease Control (CDC) on January 21, 2020. Even in late January, it was unclear whether the virus was spreading from animal-to-person or how easily it could be transferred from person-to-person.
Stories of note about coronavirus response efforts from Central Florida companies include:
- Limbitless Solutions and Volusia County’s FitUSA transition production capacity to make masks and protective gear.
- Polk County headquartered Publix, offers rent relief in Publix-owned shopping centers.
- Charter offers free access to Wi-Fi for 60 days for K-12 and college student households. AT&T expanded eligibility for more households to participate its $10/month internet ACCESS program and announces $5.5 million commitment to feed first responders.
- Fattmerchant partners with Gift Up! to provide small businesses with the ability to sell online gift cards.
These are only a few of the amazing things Central Florida companies are doing as part of their relief and response efforts. Visit the COVID-19 Business Assistance Center for more information.