In an encouraging burst of hiring, America’s employers added 850,000 jobs in June, well above the average of the previous three months and a sign that companies may be having an easier time finding enough workers to fill open jobs.
Friday’s report from the U.S. Labour Department was the latest sign that the reopening of the economy is propelling a powerful rebound from the pandemic recession. Restaurant traffic across the country is nearly back to pre-pandemic levels, and more people are shopping, travelling and attending sports and entertainment events.
The number of people flying each day is also about 80 per cent of pre-COVID-19 levels. And Americans’ confidence in the economic outlook has nearly fully recovered.
The result is that many businesses are desperate to hire and have posted a record-high number of jobs. With competition for workers intensifying, especially at restaurants and tourist and entertainment venues, employers are offering higher pay, along with signing and retention bonuses and more flexible hours. The proportion of job advertisements that promise a bonus has more than doubled in the past year, the employment website Indeed has found.
The unemployment rate rose to 5.9 per cent, up slightly from May but still well down from the peak it hit of 14.8 per cent rate in April of last year, just after the coronavirus erupted and triggered tens of millions of layoffs.
Not enough workers
Hiring is picking up, and so is the supply of available jobs.
Total available jobs reached 9.3 million in April, the highest in 20 years of data, according to the Labour Department. Employment website Indeed has said that job postings have increased still further since then.
The supply of potential hires, however, is being held back by a variety of factors. Many Americans still have health concerns about working around large numbers of people. About 1.5 million people, mostly women, are no longer working or looking for work because they had to care for children when schools and daycare centres shut down. And roughly 2.6 million older workers took advantage of enlarged stock portfolios and home values to retire early.
On Thursday, the government reported that the number of people who applied for jobless aid last week fell to 364,000, the lowest level since the pandemic began.
There are also signs that people are re-evaluating their work and personal lives and aren’t necessarily interested in returning to their old jobs, particularly those that offer modest wages. The proportion of Americans who quit their jobs in April reached its highest level in more than 20 years.
Nearly six per cent of workers who are in an industry category that includes restaurants, hotels, casinos and amusement parks quit their jobs in April — twice the proportion of workers in all sectors who did so.
A rising number of people quitting jobs, often for higher-paying positions, means that even employers that have been hiring may be struggling to maintain sufficient staffing levels.
While the jobs news is positive, economist Sal Guatieri with Bank of Montreal noted that a lot of sectors are still showing very little employment growth.
“Most of the new jobs now being created are in sectors that were slammed by the pandemic, while companies in other industries are struggling to find available workers … this doesn’t bode well for strong organic growth,” he said.