Home Posts The United States Adds Only 559,000 Jobs, Indicating That Hiring Will Be Difficult In The Coming Months.
The United States Adds Only 559,000 Jobs, Indicating That Hiring Will Be Difficult In The Coming Months.
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The United States Adds Only 559,000 Jobs, Indicating That Hiring Will Be Difficult In The Coming Months.


WASHINGTON (AP) — Employers in the United States added 559,000 jobs in May, up from a sluggish gain in April but indicating that many businesses are still struggling to find enough workers as the economy recovers from the pandemic recession.

The Labor Department reported Friday that last month's job gains exceeded April's revised total of 278,000, lowering the unemployment rate to 5.8% from 6.1%.

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.

Many large chains, including Amazon, Walmart, Costco, and Chipotle, have raised starting pay to attract more applicants, but the results have been mixed. The number of people working or looking for work fell slightly in May, following three months of gains.

The economy expanded at a robust 6.4% annual rate in the fourth quarter, and economists expect growth to reach 9% or higher in the current quarter. All of this growth, driven by higher spending, has raised inflation concerns, but for the time being, it has primarily boosted labor demand.

According to the employment website Indeed, job postings in late May were nearly 26% higher than pre-pandemic levels, and posted jobs are at their highest level since records began in 2000.

And consumers are opening their wallets, increasing their spending in April after a large increase in March, fueled by the distribution of $1,400 stimulus checks. With more Americans feeling comfortable staying in hotels and visiting entertainment venues, spending on services increased.

In fact, service industries such as banking, retail, and shipping expanded at the fastest rate on record in May, indicating that consumers are beginning to shift away from the large goods purchases that many of them made while hunkered down at home and toward spending on services such as haircuts, sporting events, and vacation trips, which had been widely anticipated.

The number of people seeking unemployment benefits has fallen for five weeks in a row to its lowest level since the pandemic began, indicating that layoffs are dwindling. There are still 15 million people receiving either federal or state jobless assistance, though that number has also decreased from roughly 20 million in February.

While businesses are rushing to hire new employees, many unemployed people are looking for better jobs than they had before the pandemic, are worried about contracting COVID-19, or have decided to retire early.

This misalignment resulted in a sharp slowdown in hiring in April, when employers added far fewer jobs than economists predicted and far fewer than in March.

Though the economy still has 8.2 million fewer jobs than before the pandemic, job postings in late May were nearly 26% higher than before the pandemic, according to the employment website Indeed, and posted jobs have reached their highest level on record dating back to 2000.

Many businesses blame a $300-per-week federal unemployment benefit for discouraging some of the unemployed from seeking work, and Republican governors in 25 states have responded by cutting off that benefit early, beginning this month, before it is scheduled to end nationally on September 6.

Becky Frankiewicz, president of Manpower Group's North American division, said many of the firm's clients are raising pay and benefits to attract more applicants. Some of these companies, particularly in manufacturing and warehousing, are also trying other tactics, such as paying their employees weekly or even daily, rather than every two weeks.

According to Frankiewicz, approximately 60% of Manpower's temporary placements leave their jobs before their temporary assignment ends, primarily due to better offers.

“People have options,” she said, adding that businesses must provide “rapid cash flow, rapid hiring, and a high level of flexibility in how they work.”

For the time being, however, there are indications that many unemployed people are hesitant to look for work.

On a conference call with investors on Thursday, Tony Sarsam, CEO of SpartanNash, a grocery distributor and retailer, stated that the company participated in a job fair last month with 60 companies that had 500 open positions.

“Only four candidates appeared,” Sarsam stated.

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Anne D'Innocenzio, an Associated Press retail writer in New York, contributed to this report.

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