The U.S. Bureau of Labor Statistics (BLS) today reported total nonfarm payroll employment increased by 559,000, slightly below analyst expectations but continuing a five month increase in job growth. Unemployment rate declined by 0.3 percentage point to 5.8 percent.
Gains of almost 300,000 jobs in the leisure and hospitality industry drove much of the expansion.
“Our Network offices continue to grow as the U.S. economy expands and our clients’ demand for qualified executive, technical, professional, and managerial talent seems limitless. In our most recently reported month, April 2021, our offices saw almost a doubling of successful search assignments versus the prior April and turned in the strongest overall performance in years,” said Bert Miller, President and CEO of MRI. “Throughout the pandemic our recruitment teams leveraged technology to help clients successfully find and hire great talent through virtual interviews. But it was the promise of a rapid development and roll-out of the U.S. vaccine program, starting as early as October 2020, that supplied clients the added confidence to hire — and candidates the boldness to move from one company to another.”
The BLS reported in May, 16.6 percent of the nonfarm workforce teleworked because of the of the pandemic. This was down from 18.3 percent in the prior month indicating an acceleration in the rate or return to on-site work as the vaccine and relaxed shut-down rules impacted worker behavior.
Economists predict that the labor market won’t fully recover until 2022 despite the current robust demand for workers. “We think it will take several months for frictions in the labor market to work themselves out,” said Michael Gapen, chief U.S. economist at Barclays. “That just means we shouldn’t be expecting one to two million jobs every month. Instead, it will be a more gradual process.”
Providing added detail on what is driving the relatively moderate rate of job recovery, Reuters’ reporter Lucia Mutikani observed, “Government-funded benefits, including a $300 weekly unemployment subsidy, are also constraining hiring. Republican governors in 25 states are terminating this benefit and other unemployment programs funded by the federal government for residents starting next Saturday. These states account for more than 40% of the workforce. The expanded benefits will end in early September across the country. That, together with more people vaccinated and schools fully reopening in the fall, is expected to ease the worker scarcity by September.”
In May, employment in leisure and hospitality increased by 292,000, as pandemic-related restrictions continued to ease in some parts of the country. Nearly two-thirds of the increase was in food services and drinking places (+186,000). Employment also rose in amusements, gambling, and recreation (+58,000) and in accommodation (+35,000).
Healthcare and social assistance added 46,000 jobs in May. Employment in healthcare continued to trend up (+23,000), reflecting a gain in ambulatory healthcare services (+22,000). Social assistance added 23,000 jobs over the month, largely in child day care services (+18,000).
Employment in information rose by 29,000 over the prior month. Reflecting a return to a more normal pattern in the entertainment industry, job gains in May occurred in motion picture and sound recording industries (+14,000).
Manufacturing employment rose by 23,000 in May. A job gain in motor vehicles and parts (+25,000) followed a job loss in April (-38,000).
Transportation and warehousing added 23,000 jobs in May. Employment increased in support activities for transportation (+10,000) and in air transportation (+9,000).
In other key industries, employment in wholesale trade increased by 20,000 in May, mostly in the durable goods. Construction employment edged down in May (-20,000), reflecting a job loss in non-residential specialty trade contractors (-17,000). Employment in professional and business services and retail trade remained relatively flat versus April.
In May, employment changed little in other major industries, including mining, financial activities, and other services.
“When our talent professionals sit down with their C-level clients and ask what’s most important to their company and what’s led to their success, they always say it’s their people. The most astute of these clients never surrendered to a hiring freeze mentality when the downturn began in March 2020. They continued to hire ‘multiplier-capable’ talent to ensure they had the right people in place when the economy would invariably roar back in recovery. Today, clients across the board, in every one of our industry sectors are hiring. Our planning sessions with all of them include the message that the search for top talent transcends virtually any economic downturn,” noted Miller.