US industries and states show uneven recovery from Covid-19

The 2020 pandemic was unique when it came to changes in the labor market. Unlike in previous recessions, most layoffs from the pandemic were temporary. While employment is back to pre-pandemic levels, the recovery has been uneven across states and industries, leaving some states still with a deficit while others have grown past 2019 levels. Utah, for example, according to an economic commentary by Martin DeLuca and Roberto Pinheiro of the Cleveland Fed, observed employment growth above 6% since 2019, while Vermont remains 6.5 percent below its 2019 average employment. Similarly, while services and sales occupations are down 6% and 7%, respectively, since 2019, the authors found that management and computer and engineering occupations are up 7% and 10%, respectively.

This uneven recovery may be due to the differences in regulations between states. The authors found that more stringent COVID-19 containment measures were associated with lower population growth, indicating some out migration from these states. The pandemic did change the distribution of workers with the introduction of more remote work, influencing economic activity all around, but this shift may be from limits on certain industries rather than location.

Ultimately the authors concluded that while there were some changes in the distribution of economic activity across space, these changes were not due to lack of productivity in any of the states but rather an uneven recovery due to the reasons mentioned above.