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US Adds Just 266,000 Jobs 05/07 08:16
America's employers added just 266,000 jobs last month, sharply lower than
in March and a sign that some businesses are struggling to find enough workers
as the economic recovery strengthens.
WASHINGTON (AP) -- America's employers added just 266,000 jobs last month,
sharply lower than in March and a sign that some businesses are struggling to
find enough workers as the economic recovery strengthens.
With viral cases declining and states and localities easing restrictions,
businesses have added jobs for four straight months, the Labor Department said
Friday. Still, the unemployment rate ticked up to 6.1% from 6% in March.
At the same time, optimism about the economic recovery is growing. Many
Americans are flush with cash after having received $1,400 federal relief
checks, along with savings they have built up after cutting back on travel,
entertainment and dining out over the past year. Millions of consumers have
begun spending their extra cash on restaurant meals, airline tickets, road
trips and new cars and homes.
Most economists expect job growth to strengthen as more vaccinations are
administered and trillions in government aid spreads through the economy. Even
if another uptick in COVID-19 cases were to occur, analysts don't expect most
states and cities to reimpose tough business restrictions. Oxford Economics, a
consulting firm, predicts that a total of 8 million jobs will be added this
year, reducing the unemployment rate to a low 4.3% by year's end.
Still, the economic rebound has been so fast that many businesses,
particularly in the hard-hit hospitality sector -- which includes restaurants,
bars and hotels -- have been caught flat-footed and unable to fill all their
job openings. Some unemployed people have also been reluctant to look for work
because they fear catching the virus.
Others have entered new occupations rather than return to their old jobs.
And many women, especially working mothers, have had to leave the workforce to
care for children.
Most of the hiring so far represents a bounce-back after tens of millions of
positions were lost when the pandemic flattened the economy 14 months ago. The
economy remains more than 8 million jobs short of its pre-pandemic level.
The Biden administration's $1.9 trillion rescue package, approved in early
March, has helped maintain Americans' incomes and purchasing power, much more
so than in previous recessions. The economy expanded at a vigorous 6.4% annual
rate in the first three months of the year. That pace could accelerate to as
high as 13% in the April-June quarter, according to the Federal Reserve Bank of
Atlanta.
One government report last week showed that wages and benefits rose at a
solid pace in the first quarter, suggesting that some companies are having to
pay more to attract and keep employees. In fact, the number of open jobs is now
significantly above pre-pandemic levels, though the size of the labor force --
the number of Americans either working or looking for work -- is still smaller
by about 4 million people.
In addition, the recovery remains sharply uneven: Most college-educated and
white collar employees have been able to work from home over the past year.
Many have not only built up savings but have also expanded their wealth as a
result of rising home values and a record-setting stock market.
By contrast, job cuts have fallen heavily on low-wage workers, racial
minorities and people without college educations. In addition, many women,
especially working mothers, have had to leave the workforce to care for
children.
iden's relief package also added $300 to weekly unemployment benefits. Meyer
calculated that for people who earned under $32,000 a year at their previous
job, current unemployment aid pays more than their former job did -- a reality
that could keep up to 1 million people out of the workforce. In addition,
higher stock prices and home values might have led up to 1.2 million older
Americans to retire earlier than they otherwise would have.
Still, some economists say employers will have to offer higher pay to draw
more people back into the job market.
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