US Adds 559,000 Jobs in May
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WASHINGTON — U.S. employers added 559,000 jobs in May, an improvement from April’s sluggish gain but still evidence that many companies are struggling to find enough workers as the economy rapidly recovers from the pandemic recession.
Last month’s job gain was above April’s revised total of 278,000, the Labor Department said June 4. The unemployment rate fell to 5.8% from 6.1%.
For-hire trucking employment contracted by 1,900 in May after increasing a total of 3,200 the previous two months.
The speed of the rebound from the pandemic recession has caught employers off guard and touched off a scramble to hire. The reopening of the economy, fueled by substantial federal aid and rising vaccinations, has released pent-up demand among consumers to eat out, travel, shop, attend public events and visit with friends and relatives.
Payroll employment rises by 559,000 in May; unemployment rate declines to 5.8% https://t.co/1Y9cSWJUIB #JobsReport #BLSdata — BLS-Labor Statistics (@BLS_gov) June 4, 2021
Many large chains, including Amazon, Walmart, Costco and Chipotle, have raised starting pay to better attract applicants. Yet so far, those efforts aren’t bearing much fruit. The number of people working or looking for work last month slipped slightly in May after three months of gains.
The economy expanded last quarter at a 6.4% annual rate, and economists envision growth in the current quarter reaching 9% or more. All that growth, driven by higher spending, has raised inflation fears. But for now, it has mainly propelled demand for labor.
Job postings in late May were nearly 26% above pre-pandemic levels, according to the employment website Indeed. Government data shows that posted jobs are at the highest level on records dating to 2000.
And consumers are opening their wallets. In April, they increased their spending after a huge gain in March that was fueled by the distribution of $1,400 stimulus checks. With more Americans feeling comfortable about staying in hotels and visiting entertainment venues, spending on services jumped.
In fact, service industries, including banking, retail and shipping, expanded at the fastest pace on record in May. Evidence suggests that consumers have begun to embark on a long-anticipated shift away from the sizable goods purchases that many of them had made while hunkered down at home to spending on services, from haircuts to sporting events to vacation trips.
The number of people seeking unemployment aid has fallen for five straight weeks to its lowest level since the pandemic began, a sign that layoffs are dwindling. Still, 15 million people are receiving either federal or state jobless aid, though that number also has declined from about 20 million in February.
Today’s jobs report shows historic progress for American families and the American economy. We added 559,000 jobs in May, created a record two million jobs in our first four months, and unemployment is at its lowest level since the pandemic started.
America is on the move again. — President Biden (@POTUS) June 4, 2021
The fading of the pandemic produced a disconnect between companies and the unemployed. While businesses are rushing to add workers immediately, many of the unemployed are either seeking better jobs than they had before the pandemic, worry about contracting COVID-19 or have decided to retire early.
That mismatch resulted in the sharp slowdown in hiring in April, when employers added far fewer jobs than economists had forecast and many fewer than had been hired in March.
Though the economy still has 8.2 million fewer jobs than it did before the pandemic struck, job postings in late May were nearly 26% above pre-pandemic levels, according to the employment website Indeed. Government data shows that posted jobs have reached their highest level on record dating to 2000.
Many businesses blame a $300-a-week federal unemployment benefit for discouraging some of the jobless from taking work. Republican governors in 25 states have responded by cutting off that benefit prematurely, starting this month, before the benefits are scheduled to end nationally on Sept. 6.
Becky Frankiewicz, president of the temporary staffing firm Manpower Group’s North American division, said many of the firm’s clients are raising pay and benefits to try to attract more applicants. Some of these companies, particularly in manufacturing and warehousing, also are trying other tactics, like paying their workers weekly or even daily, rather than every two weeks. Manpower also is encouraging its clients to make job offers the same day as an interview rather than waiting.
About 60% of Manpower’s temporary placements are leaving their jobs before a temporary assignment ends, Frankiewicz said, mostly because they are receiving better offers.
“People have options,” she said. “Companies have to offer speed in cash, speed to hire and a lot of flexibility in how they work.”
For now, though, there are signs that many of the unemployed remain cautious about seeking jobs.
On June 3, Tony Sarsam, CEO of SpartanNash, a grocery distributor and retailer, said on a conference call with investors that the company took part last month in a job fair with 60 companies that had 500 jobs to fill.
“Only four candidates showed up,” Sarsam said.
Anne D’Innocenzio contributed to this report from New York.
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