It’s been more than a year since the pandemic tore through the U.S. and sent the economy into a recession. But recent data indicates the labor market recovery is well underway and it could be a major positive catalyst for some media giants.
It’s no secret that COVID took a heavy toll on employment last year. At the peak of the COVID crisis last April, the unemployment rate skyrocketed to 14.7%. However, since that initial wave of layoffs hit the country, there has been a steady decline in the unemployment rate. According to the Labor Department’s latest monthly employment report, it fell to 6% in March.
In March, the U.S. economy added 916,000 jobs and far exceeded economists’ projections for 660,000 job additions. It was the largest monthly payroll gain since August 2020.
The rapid pace of vaccinations across the country and easing of pandemic-related business restrictions boosted job growth in the services sector and contributed to the better-than-expected overall print. Leisure and hospitality, which were hit hardest during the pandemic, added 280,000 jobs in March and had the largest gain of any industry.
Within leisure and hospitality, jobs created in food services and drinking places accounted for two-thirds of the gains in the industry, but arts, entertainment and recreation added a healthy 64,000 jobs while accommodation added 40,000.
In addition, companies are announcing fewer job cuts after last April’s peak. According to global outplacement firm Challenger, Gray & Christmas, job cut announcements by U.S.-based companies fell 86% from last year to roughly 30,000 in March.
Hiring is picking back up across the board, and Challenger’s latest monthly report showed the entertainment and leisure industries had the most job hiring announcements in March, followed by government, health care and products. So far in 2021, entertainment and leisure added more than 41,400 jobs.
The entertainment and leisure industry’s hiring bounce was partially due to big rehiring plans from companies like Comcast and Disney. Both employ thousands of workers across their theme parks businesses.
Comcast plans to reopen its Universal Studios Hollywood theme park on April 16, and Disney will be reopening both its Disneyland and California Adventure parks April 30.
Disney announced in late November it would be laying off 32,000 employees in the first half of fiscal 2021. Most of the layoffs were from Disney’s Parks, Experiences and Products business, which employed 155,000 workers as of Oct. 3.
Though Comcast hasn’t specified how many employees it plans to bring back at the park’s reopening, Disney said it will be calling back more than 10,000 furloughed workers as its parks reopen.
The pace of rehiring may not be as quick as many hoped, but the strong March jobs report was a positive indicator that jobs growth will only continue to ratchet higher in the months ahead. Investors have been waiting with bated breath for Disney and Comcast to reopen their struggling theme parks.
Even as the pandemic put immense pressure on their core businesses, Comcast and Disney shares were resilient through 2020. Since the market lows last March, Comcast stock jumped 60% and Disney rose 120% as of market close Tuesday. Both stocks hit record highs earlier in March.
The reopenings are within arm’s reach, and thus a recovery in NBCUniversal and Disney’s legacy businesses are only a matter of time. If the jobs growth in the entertainment and leisure industry is any indication, and if that momentum continues in the months ahead, it could be the next major catalyst for even more upside ahead for the stocks of media behemoths Comcast and Disney.