By CHRISTOPHER RUGABER Writer in economics of AP
WASHINGTON (AP) – In an encouraging wave of hiring, U.S. employers created 850,000 jobs in June, well above the previous three-month average and a sign that companies may have an easier time finding enough workers to fill vacancies.
Friday’s Department of Labor report was the latest evidence that reopening the economy is propelling a powerful rebound from the pandemic recession. Restaurant traffic across the country is almost back to pre-pandemic levels, and more people are shopping, traveling, and attending sporting and entertainment events. The number of people flying each day has returned to about 80% of its pre-COVID-19 levels. And Americans’ confidence in the economic outlook has almost fully recovered.
The result is that many companies are desperate to hire and have posted a record number of jobs. With increased competition for workers, especially in restaurants and tourist and entertainment venues, employers are offering higher wages, along with signing and retention bonuses and more flexible hours. The proportion of jobs that promise a bonus has more than doubled in the past year, the employment website Indeed found.
The unemployment rate fell from 5.8% in May to 5.9% in June, according to Friday’s report. Despite steady gains in the labor market, unemployment remains well above the 3.5% rate that prevailed before the pandemic, and the economy remains at 6.8 million jobs below its pre-pandemic level. the pandemic. Yet unemployment fell from 14.8% in April last year, just after the coronavirus erupted and tens of millions of layoffs triggered.
Hiring in June was particularly strong in a category that primarily includes restaurants, bars and hotels, which collectively absorbed the brunt of recession layoffs; this category added 343,000 jobs. Governments have added 188,000 jobs, mostly in education. And hiring by retailers has picked up, with 67,000 jobs added.
The number of advertised job vacancies reached 9.3 million in April, the highest number in 20 years of data, according to the latest data from the Ministry of Labor. Job vacancies have increased further since then, according to the Indeed website.
Yet a number of factors still limit the availability of workers. Some unemployed people fear accepting service work that would involve direct contact with the public. In addition, around 1.5 million people left the workforce during the pandemic to care for children or other loved ones and have not fully returned. And an estimated 2.6 million older workers have taken advantage of expanded equity portfolios and home values to retire early.
In June, the proportion of Americans who have or are looking for jobs – a figure called labor force participation – remained unchanged and remains well below what it was before the pandemic. For the economy to regain its full health, this figure should increase in the coming months.
But the flat reading of labor market participation mainly reflects a decline in the proportion of adolescents who are working or looking for a job. In contrast, Americans aged 20 and over were more likely to have or look for a job in the past month.
A temporary federal unemployment benefit of $ 300 per week, in addition to regular state unemployment assistance, may allow some people to be more selective in finding and taking employment. About half of the states plan to stop paying the supplement by the end of July, which supporters say is an effort to get more unemployed people to look for work. On Thursday, the government said the number of people applying for unemployment assistance last week fell to 364,000, the lowest level since the start of the pandemic.
There are also signs that people are re-evaluating their work and personal lives and are not necessarily interested in returning to their old jobs, especially those that offer modest wages. The proportion of Americans who left their jobs in April reached its highest level in more than 20 years.
Almost 6% of workers in an industrial category that includes restaurants, hotels, casinos and amusement parks left their jobs in April, twice the proportion of workers in all industries who did. made.
The growing number of people leaving their jobs, often for higher paying positions, means that even employers who have hired can struggle to maintain sufficient staffing levels.
A survey of manufacturers in June revealed numerous complaints among factory executives about labor shortages. Many said they were experiencing significant turnover due to what they called “wage dynamics”: other companies attract their workers with higher wages.
Karen Fichuk, managing director of Randstad North America, a recruiting and staffing company, said job site Monster, which Randstad owns, found that job postings jumped 40% from May to June. . Job searches, on the other hand, only increased by 4%.
The struggle to fill jobs coincides with a rapidly growing economy. During the first three months of the year, the government estimated that the economy grew at a strong annual rate of 6.4%. In the April-June quarter that just ended, the annual rate would have hit a sizzling 10%.
And for the whole of 2021, the Congressional Budget Office estimated on Thursday that growth will amount to 6.7%. It would be the fastest calendar year expansion since 1984.
Meanwhile, consumer confidence rose in June, according to the Conference Board, and is almost back to its pre-pandemic level. Americans also don’t seem daunted by recent price increases, with the percentage of consumers considering buying a home, car, or major household appliance on the rise. Home prices increased the most in April in 15 years.
Factory output is also growing at a steady pace, in part because companies are investing more in industrial machinery, airplanes and technology. These investments could make workers more efficient in the years to come and stimulate long-term growth.