“This has been an extraordinary job rise, but this type of growth can not last forever, especially now that unemployment is as low as it is,” said Scott Anderson, chief economist at Bank of the West in San Francisco. It will be more difficult to find people to return to the labor market, even if you pay higher wages. “
In April, the biggest gains were concentrated in leisure and hospitality, production and transport and warehousing, as companies tried to keep up with the steady demand for goods and services.
The rapid rise of the labor market has been a cornerstone in the recovery of the pandemic and a major political resource for the Biden administration, although the workforce has been depressed by a number of factors, including retirement and care. Employers posted a record 11.5 million openings in March – almost double the number of jobseekers, according to a report from the Ministry of Labor released earlier this week.
Job openings broke new records, while 4.5 million Americans quit or changed jobs in March, reflecting the strength of the labor market
The continued strength has given the Federal Reserve the power to take aggressive measures to curb inflation. The central bank raised interest rates this week by half a percentage point, the sharpest increase since 2000, in the hope of cooling the economy without sinking it into recession.
“We must do everything we can to restore stable prices as quickly and efficiently as we can,” Fed Chairman Jerome H. Powell said Wednesday. “We think we have a good chance of doing so without a significant increase in unemployment or a really sharp decline.”
Nevertheless, there are signs of increasing uncertainty. The US economy shrank unexpectedly in early 2022, mainly due to growing trade gaps and falling commodity purchases. Inflation has been at its highest level in 40 years. And stock market prices – which hit record highs during the pandemic – have plummeted in the past week, amid renewed fears of a possible recession this year or next.
“We are at a strange stage in the cycle right now, where it is not entirely clear which direction things are going,” said Liz Ann Sonders, investment strategist at Charles Schwab. “It’s clear that it’s a scary market environment, and we’re starting to see some softening in different ways.”
Large companies, including Wells Fargo, have begun laying off workers in recent weeks, and others such as Amazon have said they are “overstaffed”, making job prospects even more muddy. In total, U.S. employers announced more than 24,000 layoffs in April, a 14 percent increase from the previous month, according to figures released this week by outplacement firm Challenger, Gray & Christmas. (Amazon founder Jeff Bezos owns The Washington Post.)
In total, the labor market still lacks 1.2 million jobs from before the pandemic, although several sectors have already made up for the loss in recent years. Transport and warehousing, for example, and professional services and business services each have around 700,000 more employees than they had in February 2020.
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Restaurants, bars and hotels are struggling to catch up after extensive layoffs early in the pandemic. The leisure and hospitality industry has quickly added new jobs, although it is still down by 1.4 million jobs, or 8.5 percent of the workforce, from pre-pandemic levels.
“The leisure and hospitality sector has led the rise, but there has been a certain decline. Wages are not as strong as in other industries, and people have been reluctant to return to these jobs and stay in them, says Nela Richardson, chief economist at ADP. “This is where you see both the highest job openings and the highest turnover, when it comes to ending.”
Lou Salameh, who owns 10 sandwich shops in Jacksonville, Florida, says he can not find enough workers to keep the business going.
He has started closing two hours early, at 6 pm, and often has to close parts of his restaurants even earlier if he lacks staff. He has raised his salary to around $ 12.50 an hour and started offering weekly and monthly bonuses to his employees of 150, although he still lacks around 50 workers.
“It’s extremely difficult to find help and even harder to keep,” said Salameh, who owns Sheik Sandwiches and Subs. “The salary is at an all-time high, we offer benefits and bonuses, but it has not done anything, to be honest. It just feels impossible. “
Millions retired early during the pandemic. Many are now returning to work, new data show.
But for many workers, the tight labor market continues to be favorable.
Leah Kush, who lives near Chicago, recently left her 11-year job in the radio industry for a position in a digital marketing company. It all happened very quickly: Kush applied in early April, interviewed a week later and received a job offer less than 24 hours after that.
“It was so easy that I thought, ‘Wow, this was meant to be,'” the 41-year-old said, “I feel alive again.”
Kush earns 33 percent more than at her previous job, where she had not received a salary in eight years.
“There was no extra pay, but they kept stacking things on my plate,” she said. “Finally, in January, I said, ‘I have to find something new.’ And I’m so glad I did. “