Is there a labor shortage? What the May Employment Report Tells You

A wanted sign is posted outside of work near the Memorial Day in Wildwood, NJ.

Spencer Pratt | Getty Images News | Getty Images

Lower-than-expected April employment statistics fueled speculation of a labor shortage in the United States, with some state officials saying Declare early termination For strengthening unemployment insurance.

But predictors who want a clear May aggregate result may be in trouble.

According to economists, it’s hard to draw conclusions about persistent weaknesses or labor supply issues from data released Friday. The May report provides some somewhat inconsistent data points. They said.

“It’s a Rorschach test,” said Nick Banker, an economist at Indeed, a job site. “It’s a lump of ink drawn on a piece of paper, and everyone sees a different image.”

May Job Report

For example, there is a heading number: US Economy Added 559,000 people to salary in May..

On the other hand, some observers may use data points to suggest that workers are not returning to the workforce as quickly as they would expect.

Employment figures fell below the estimated 671,000 economists. At that pace, it will take more than a year to regain all the jobs lost after February 2020.

Meanwhile, employment growth accelerated in May and new salaries doubled from April. The recent recessions have been characterized by long-term job recovery, according to economists.

Employment growth in May was also close to the average for the last three months, suggesting that it may have been as expected, Banker said.

“I think this is a story of expectations and reality,” he said. “The pace of growth is eye-catching to the viewer.”

Labor participation

Wage rise

According to Daniel Zao, senior economist at the job and job site Glassdoor, the most prominent evidence of labor shortages in the May employment report will be wage increases, especially in labor and hospitality.

Rising wages suggest that companies struggling to hire are paying more to attract workers.

Unfortunately, [May] The report does not intend to end this debate on labor shortages. Both sides have ammunition to use to strengthen their argument.

Daniel Zao

Glassdoor Senior Economist

For example, hourly wages for non-managerial positions in this sector, such as restaurants, hotels and bars, have risen nearly 9% over the past year to $ 15.87. (Revenue increased $ 0.19 per hour from April.)

This growth is important, as employment issues are most widely reported in leisure and hospitality, Zhao said.

However, this rise may not be due solely to corporate salary increases.

Critics of the labor shortage debate point to other data points, such as average working hours being relatively flat. (Companies tend to spend more time on existing employees if they can’t onboard other staff.)

“Unfortunately, [May] The report cannot end this debate on labor shortages, “he said.” Both sides have ammunition to use to reinforce their debate. “

What is the cause of supply restrictions?

Employment problems are likely to be temporary, according to economists, as long as there is a labor shortage.

Twenty-five states have completed strengthening federal unemployment benefits earlier than their official expiration on September 6 to encourage re-entry into the workforce.

The earliest time for all states to be headed by the Governor of the Republican Party is June 12.

“The loudest source of speculation [for labor shortages] Erica Groshen, a labor economist at Cornell University and a former commissioner of the Bureau of Labor Statistics during the Obama administration, said, “Weekly unemployment benefits supplements encourage many to stay home. “. It’s simple. “

Is there a labor shortage? What the May Employment Report Tells You

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