Tracking the COVID-19 Recovery: Regions, Industries, and Occupations

By Daniela Leon, Intern

As the epicenter of the COVID-19 outbreak, the United States is faced with unprecedented historic economic impacts. While the outlook of the national economy is uncertain, financial experts and statisticians have been weighing in consistently to investigate the potential outcomes, and study trends brought on by the crisis. Chmura, a leading data firm in economics and analytics, offer their latest insights around the economic recovery of the economy in a recent webinar entitled, "Tracking the COVID-19 Recovery: Regions, Industries, and Occupations."

In brief, Chmura’s findings describe the immediate impacts of the pandemic as sharp and temporary.Based on this projection, Dr. Chris Chmura explains what recovery will look like across different regions, industries, and occupations. Overall, the month of June has shown early signs of national economic recovery but the impacts felt during March and April were so significant that positive gains are still considered marginal.

In the first wave of economic impacts, supply markets experienced the greatest shock. The mandated closure of all non-essential businesses plummeted employment rates to historic lows, nearly as much as the Great Recession. Downturn effects vary widely between industries, and regional impacts are based on the spread of COVID in those areas altogether. Among the most impacted industries are restaurants, retail, arts and entertainment, as well as lodging services. Chmura estimates that employment in these industries will remain at half pre-COVID levels throughout the remainder of the year. On the other hand, industries such as utilities, professional services, and company headquarters are expected to return to 90% of pre-COVID levels by the fourth quarter of 2020, while the healthcare industry has grown beyond pre-COVID levels entirely. Total pre-COVID employment levels are projected to return to normal until the third quarter of 2022.

In recovery estimations, online job postings across the country are considered a leading indicator since they are a proxy for occupation demand; Chmura has produced a Vulnerability Index​ that examines these trends in greater detail. While there is a wide variation by region, the gap between expected pre-COVID job postings and the present amount is narrowing. The demand for cyber skill employment demonstrates notable demand as defense firms try to reduce the spike in fraudulent activity. Additionally, layoffs continue at a much slower rate, and unemployment claims are decreasing. Federal intervention strategies such as the CARES Act and the Payroll Protection Program have also effectively minimized the brunt of income and unemployment impacts. With an increase in unemployment benefits, individuals and households reflect higher earnings over 10% their original wages and in turn have more spending capital available once consumer restrictions are lifted.

Ultimately, economic recovery will be a long and piecemeal process. As states continue to lift restrictions for the public at varying rates, demand shocks will be challenging to overcome. Effective testing and treatment are essential in helping the public feel safe to consume, therefore, if a vaccine arrives sooner recovery can be expected earlier. 

While the outcomes remain uncertain, Chmura offers some insights on the long term future of recovery. Estimates indicate that manufacturing may rise in the first quarter of 2021 especially for pharmaceutical industries that may even turn to increased reshoring. Economic trends also indicate that after a recession a boost in productivity and investment is common, especially as wages rise in different industries. Citing the example of individuals earning higher wages via unemployment benefits, companies and industries may turn to investment in automated businesses, potentially ushering in an increase in mechanization. Moreover, as many individuals have been forced out of employment and in some cases into different industries altogether, it is possible that people will increasingly turn to higher education and vocational training in order to gain new skills for available labor markets. As the pandemic evolves, Chmura continues to examine economic impacts and trends as they develop. Further webinars can be found on their website.