U.S. hiring began to recover in July, but still fell 7.4% below the July 2019 level, according to LinkedIn. LinkedIn Principal Economist Guy Berger joins the On the Move panel to discuss.

Video Transcript

ADAM SHAPIRO: --jobs numbers. We had the initial claims for unemployment. We'll get the Labor Department employment report-- unemployment report tomorrow. But joining us now is LinkedIn's Guy Berger. He is the LinkedIn principal economist. And we've got the LinkedIn Workforce Report. And one of the things, Guy, that the report indicates is that hiring in the United States is recovering. It's now, what, only 7.4% lower than it was in July of 2019. Help us understand what that means as we try to get back on our feet.

GUY BERGER: Yeah, Adam, thanks. That's a great question. I think, when you think about the economy, we had a super-- super-sharp plunge back in March and the first half of April. And then, starting in the middle of April and since then, we've seen some of these indicators recover, both in the hiring we track, in the claims data, and really, by the time we reach July, things have improved, not the whole way, but a lot of the way back.

I think what-- what I'm thinking about a lot, though, as we look ahead is what you talked about in terms of COVID cases picking up, potentially, in the Northeast, what Jessica talked about, with fiscal stimulus already having expired last week and unclear whether it's coming back. These things are going to potentially put a ceiling or a damper on further gains.

Can we get back to, you know, where we were at the beginning of the year in the next few months? I think that's really open to question. Maybe the biggest gains are already behind us and the rest of the way forward is going to be a big slog.

JULIE HYMAN: And it's also, of course, unclear, Guy, where the gains are going to be, how uneven it's going to be across industries. I know you guys are looking at different industries. And I have a question about one of them. You say public administration did the best last month, leading the pack with 12% growth. Then there was wellness and fitness, which is also interesting, 10% growth. What's public administration mean? Is that government workers, for example? What does that include?

GUY BERGER: Yeah, I think it includes a lot of things in the public sector. And I think that's one of the sectors, at least so far, has been deemed less by the fall-off in demand or by government shutdowns that affected other sectors. But it's also something that potentially, if you think about it-- and again, this brings us back to stimulus-- is vulnerable going forward. We know that state and local governments are very vulnerable in terms of their finances. There's controversy over whether the next stimulus bill is going to include funding for the institutions. So you know, even this one sector that's so far doing pretty well because it's vulnerable to the back-and-forths of consumer and business demand might still take a backstep if-- if fiscal stimulus doesn't deliver going forward.

BRIAN CHEUNG: Hey Guy, it's Brian Cheung. Great to speak with you. So something that I was interested in from the jobless claims number this morning was specifically pandemic emergency unemployment compensation, which is an extension of those employment benefits to those who were previously on unemployment insurance, but maybe had their claims expire during this period of time. These are people that have likely been on the sidelines even before COVID.

What does that speak to when we talk about the permanent damage to the labor economy? Are there other types of metrics that you're also looking at to see, now that we're x amount of months into this, whether or not we're going to come out on the other side with a dramatically different-looking labor market.

GUY BERGER: I'd say the number-one thing I'm going to be looking at on Friday, tomorrow, is not actually the headline unemployment number but the number of people that are unemployed due to permanent layoffs. Even as overall unemployment falling down really sharply in the last few months, we've seen the permanently unemployed zooming up. It's now at levels consistent roughly with the 2001 recession. And there are signs right now, given that claims are still really, really elevated, it's going to keep moving up for at least this month and maybe beyond that.

As long as that keeps going up, I think that's going to-- that indicates that there's some limit to how-- to the rapid labor market [INAUDIBLE] we're going to see. Because once people are permanently unemployed, they have to find a new job. That takes time. We know it took a really long time after 2009 for-- to correct to that.

AKIKO FUJITA: Guy, what about the need to extend the Paycheck Protection Program? That's still part of the debate on the stimulus package in DC. If that isn't extended, how significant will the layoffs be in the second wave or the third wave?

GUY BERGER: Wow, so-- [SIGHS] you know, when we're talking about all these things are at risk and we haven't even touched upon that, I think a lot of these people are back and they're employed, despite the fact that, if there wasn't support, they'd probably be laid off. If that's not extended, if it expires, and a lot of these people that, at least on paper, are employed, could be back on unemployment insurance and looking for work when there aren't a lot of job openings out there, even though there's been some recovery on that front.

So this is-- this recovery is really vulnerable to COVID. It's really dependent on government support. Even though we've gotten some really bad numbers, they could have been worse. And we're really going to need that support going forward for at least a little while longer if not more.

ADAM SHAPIRO: All right, Guy Berger is LinkedIn's principal economist. We appreciate your being here.