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U.S. hiring outlook: 'many people are still on the sidelines right now'

Yahoo Finance’s Akiko Fujita and Zack Guzman react to the February jobs report with Karin Kimbrough, LinkedIn Chief Economist.

Video Transcript

AKIKO FUJITA: Let's bring in Karin Kimbrough, who's LinkedIn's Chief Economist, for a breakdown of these jobs numbers. Karen, I know you've been listening to Vincent and his reaction there. Let me ask you another question that we've been asking often with these reports. How do you measure the impact from the vaccine? And given the upside surprise today, are we finally seeing that trickle through in the economic data?

KARIN KIMBROUGH: Yeah, I think, as Vince was saying, I think a lot of the labor market's reactions are closely tied to the progress we're making with vaccines against the pandemic. So we're seeing that very same thing in our data. We track hiring, which is a great measure of how dynamic the labor market is.

And what we're seeing is that, you know, essentially, there's starting to be a little bit of a recovery from that stall that we had in the last couple of months. The economic data for us-- you know, we track a lot of labor market indicators-- suggest that employers are hiring. They are probably doing it a little bit on a forward-looking basis. They're sort of anticipating this stronger rebound that we all think is likely to come later in the year.

If you think about it, there's still many, many restaurants yet to fully reopen, entertainment places to fully reopen. So there's a lot more potential hiring that can happen. And there are many people who are still on the sidelines right now of-- of our economy waiting and looking for work.

ZACK GUZMAN: Yeah, I like the way that you guys often look at job postings and hiring-- future hiring plans for a lot of employers out there. What are you seeing on that front? Because it seems like this report did show us, as Akiko and I were highlighting there, a pretty serious bounce back for restaurant, leisure, and hospitality. But what about the other sectors too that had previously seen, maybe, a stronger recovery? How does the kind of sector breakdown look to you at this point?

KARIN KIMBROUGH: Yeah. Well, what-- we saw-- we-- we saw last month what is now being announced. We saw this reopening of this entertainment, recreation, and leisure sector. We saw retail pick up.

We actually saw momentum in manufacturing. I'm not here to say that there's some sort of boom in manufacturing, but we saw a lot of strong momentum in manufacturing. And anecdotally, when we talk to companies, they tell us they're busier than ever trying to meet the needs for people who are looking for durable goods, are doing home renovation. So that's probably fueling a lot of that domestic manufacturing boom.

The other thing that we're noticing generally is that it's a lot more broad based than what it was a few months ago. So if you think about this recovery, what we're starting to see is that many, many more industries are participating in the pickup. It's not just narrowly focused on, say, health care or software, which we often see a lot of strength in hiring there.

But we're seeing momentum pretty much across the board with the exception of a few sectors. Say, mining and energy still seem to be a little on the soft side for us. Education, which Vince mentioned, is very much tied to state and local government budgets. That was also a little bit soft. But a lot of strength across a number of industries. In fact, the most that we've seen since COVID hit.

So for me, what I think of-- this is largely like, we're broadening the base of the foundation for the recovery. I would not say that the recovery is in full swing. I think it's just managed to kind of pick itself out of the hole that was dug in December and January when we had, at the time, weaker numbers. It looks like January's number got revised up a little bit, which is-- was good to see.

AKIKO FUJITA: Karin, I'm curious what you're seeing on wage growth, at least your first hand account. When you think about businesses that are listing on LinkedIn, certainly a lot of jobs, to your point, and certain sectors being posted. But how competitive are the wages?

KARIN KIMBROUGH: So I'm really excited. People often think that LinkedIn is purely one kind of play for employers, that it's only, say, professional, white collar. But we have a lot of other types of members on our platform who are looking at opportunities and getting in the game. So I think it's actually been fairly competitive.

I think when you show this graph here, what you're seeing, though, is a compositional effect. With so many people in the service sector, which is typically a little bit lower wage having lost their jobs in the last 9 to 10, 11 months, that left higher paying wages in-- in [? mismeasure. ?] And so it's sort of been skewed up, if you will.

But what we see is that there is a really healthy demand for all workers of all skill sets. And we're excited about the fact that we think that there's going to be support for wages going forward.

ZACK GUZMAN: I think a lot of people would be happy to hear that as well. Karin Kimbrough, LinkedIn Chief Economist. Appreciate you coming on here to chat with us today.