The hiring of 266,000 because the COVID curbs subsided
Employers created a disappointing 266,000 jobs in April, despite the fact that the number of new COVID-19 cases remained low, more states lifted restrictions and accelerated vaccinations.
The gains fell far short of the forecast of a recovery, which is expected to gain in importance over the course of the summer. A million or more jobs are created every month.
The unemployment rate rose from 6% to 6.1% as a sharp rise in the labor force – the number of Americans working or looking for work – more than offset solid job gains, the Department of Labor said Friday.
According to a Bloomberg poll, economists had estimated 995,000 jobs last month. Instead, February and March earnings were revised by a total of 78,000, with blockbuster gains downgraded to 770,000 from 916,000 in March.
Recreation and hospitality, which includes restaurants and bars – the industry hardest hit by wage losses – continued to recover, creating 331,000 jobs. However, other sectors showed poor results. Professional and business services lost 79,000 jobs as recruitment agencies cut 111,000 jobs. Transportation and storage, which boomed when Americans mostly stayed home during the pandemic, cut 74,000 jobs. The retail sector lost 15,000 jobs; Production sheds 18,000; and employment in construction remained unchanged after a massive increase in the previous month.
The public sector has created 48,000 jobs. More schools will reopen for personal tuition, boosting employment in local public education and creating 31,000 jobs. This also allows more parents to return to the workforce.
Employment growth is expected to boom in the coming months. Oxford Economics expects a record of around 8 million new jobs this year.
New COVID cases remained low through April, while increasing vaccinations resulted in more states lifting capacity limits in restaurants and other businesses. About a third of the US population is fully vaccinated, according to the Centers for Disease Control and Prevention. This has led restaurants and other outlets to recall more workers on leave or to increase their hiring.
But after steadily declining during the health crisis, the number of Americans temporarily laid off rose 88,000 to 2.1 million, suggesting that some companies continued to take workers off while others hired. Around 21% of the unemployed said they were being laid off temporarily, largely unchanged from the previous month. This means that many workers could still be returned to their old jobs.
The number of permanently laid-off Americans rose 97,000 to 3.5 million and is a longer-lasting scar on the economy.
The hiring is expected to increase significantly in the coming months. States are opening up again as households benefit from income gains that have squeezed spending. Americans are flush with two rounds of state economic reviews – a total of $ 2,000 per person – that have been paid out since December and have increased unemployment benefits by $ 2.8 trillion in COVID aid.
However, many employers say that unemployment benefits – including a $ 300 grant – contribute to their biggest problem: a labor shortage despite historically high unemployment.
Kyle Ewing, president of TerraSlate, which makes and prints waterproof menus and other products, says sales rose 55% last month compared to February as more states allowed restaurants to raise occupancy limits.
“We were phenomenally busy,” he says.
Ewing, who wanted to double his workforce of eight, received many CVs. However, some candidates told him they only applied to meet job search requirements for unemployment insurance but preferred to continue receiving the generous benefits rather than work. With payments slated to expire in September, he believes the hiring might slowly change, and Ewing has hired five workers in the past few weeks.
There are other reasons for the labor shortage. Many people are still worried about finding work during a pandemic while others worry about children doing distance learning at home, says Becky Frankiewicz, president of recruitment firm Manpower Group.
“There are more vacancies than before the pandemic and fewer workers,” she says.
The shortage of production and warehouse jobs is particularly acute, says Amy Glaser, senior vice president of the Adecco HR company. More candidates made employers “spooky” or didn’t show up for interviews or on their first day of work, she says.
Candidates looking for a job say hiring is increasing. 65-year-old Bill Noirot from St. Charles, Illinois, lost his sales position at a software company last June because the company feared that business customers would cut purchases in an uncertain environment.
He was tirelessly looking for a new job and had around 40 phone interviews, but didn’t sense that until recently employers intended to hire new employees. He got a job at the end of February and started in March. “It just seemed like they got more serious over time” once vaccines became widely available, which brightened the economic outlook.
Other measures of the economy and the labor market have shown. Between Labor employment surveys in March and April, initial jobless claims, a measure of layoffs, fell by 200,000 to 566,000. Employment in small businesses was at its highest level since October, according to Homebase, which provides workforce planning software.
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