Exceeding and in some cases, surpassing predictions for a robust job gains for the month of June, Friday’s report from the US Labor Department, gave most observers and economists a high, with the figure of 850,000 nonfarm payroll jobs, a jolt in the arm for the American economy, and salve for the worried nerves of all, from the White House to the Federal Reserve who feared another moribund report, like April, that sent many economists and politicians reaching for painkillers.
Instead many are now reaching to pop a cork of bubbly for news that sent the US recovery on a straight path towards a recovery, albeit slower than many might have wanted. But, some say that reach may be too soon, with many employers still panting for employees; even with some cities hitting a $15.00 per hour minimum wage.
As we have seen before, many potential workers are waiting for in person learning to return for schools, to avoid the headaches, challenges and expense of child care, while others are fearful of working in tight spaces, and taking crowded public transportation to the workplace; while still others are afraid of the new Delta variant that is spreading across the country, especially in the South, where vaccination rates are much lower than the rest of the country.
There was good news since there was a drop from those who said Covid was a factor in looking for a job, with 1.6 million in June, down from 2.5 million in May.
This is reflected in the labor force participation rate of 61.6 percent; and, an unemployment rate, the marquee rate, as we prefer to call it, of 5.9 percent, yet that does not reflect a total picture that includes those that want to work full time, but are stuck in part time jobs.
”These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs,” the report noted, and were up 229,000 since February 2020.
The report also shows an uptick from 6.4 million not seeking a job in June, from 5 million before the pandemic baseline of February 2020.
Previous months have shown the dramatic decrease of women in the workforce, as they were forced to leave their jobs for child care and remote instruction supervisors for homebound learners, but in June, there was no significant increase in female workers, staying at 56.2 percent versus 67.5 percent for men.
Black workers stayed at 9.2 percent unemployment, higher than those of whites at 5.2 percent.
Nevertheless there is hope amidst the clouds: "This strong labor market performance – despite persistent hiring strains – is likely the start of a series of stellar reports that will underpin the strongest US economic performance since 1951 this year," Lydia Boussour of Oxford Economic, said to The Hill.
All things being partisan, the GOP has blamed President Biden’s policies of extending financial help to those in need, but there is no clear evidence that this is a factor in those hard to find employees and the fear of inflation. And, while prices have increased due to consumer demand, the tradeoff between goods and services reflects increased rates of vaccination and local government pushing vaccination.
The effect of withdrawal cannot be seen for June, since the report has a cut off, meaning that those twenty six states whose governors cut the benefits, won't be seen until the July report, so the blame game can continue with Republican opponents.
Along with the overall increase certain areas showed dramatic increase and leading again, was the leisure and hospitality field, with a gain of 343,000, showing a near phoenix like rise in an area that was devastated in the early days of the pandemic,
With the increase of vaccinations many are abandoning their bread machines and cake pans plus homemade cocktails to go to restaurants and bars, which can be seen with 194,000 of the increase in June for bars and restaurants.
The arts also showed promise with 74,000 jobs and by fall should show a dramatic increase with promised Broadway and theater openings, thrilling investors and audiences alike.
That old catchall category of professional and business services showed 72,000, and social services showed some gains, with glimmers of hope for 25,000 in children’s day care.
Possibly related for some, is the desire to “work remotely at least some of the time,” reported The New York Times, And, they cited “a Randstad survey of more than 1,200 people, 54 percent say they prefers a flexible work arrangement that doesn’t require the to on site full time,” nodding in the direction of Covid fears and, as of yet, an uneven return to in person learning, especially for elementary school students.
Previous reports, such as ours, have also shown that many “would-be workers” are re-evaluating their options from labor intensive, and physically challenging jobs, such as restaurant servers and cooks, to hotel maids and maintenance workers.
In fact the report shows that “job leavers” -- “those that left their previous jobs, that is, unemployed persons who quit or voluntarily left their previous job and began looking for new employment—increased by 164,000 to 942,000 in June.”
For temporary workers there was good news reported by Tom Gimbel, founder and CEO of LaSalle Networks, in Chicago who told CNBC that he has seen a fast change from temp to perm in “areas of accounting, admin, clerical and human resources,” and that “it’s happening at a 50% higher rate than it was preCovid.”
Incentives abound, including sign on bonuses ,once reserved for executive and high earning professionals, but now seen in restaurants, and, in June, “Southwest Airlines plans to raise minimum pay to $15 an hour for about 7,000 employees citing the need to attract and keep workers as the airline industry continues fro recover from the pandemic,” according the the Associated Press, and taking effect on Aug.1.
AP also noted that many “companies are making adjustments to their offices to help employees feel safer as they return to in person work, like improving air circulation systems or moving desks further apart.”
The bottom line for most workers is pay, but concerns are across the board, with those looking at both the Fed and the rise in inflation, as concerning. But, they may have to wait a bit, because, as Labor noted:
“Average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to $30.40 in June, following increases in May and April (+13 cents and +20 cents, respectively). Average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents to $25.68 in June. The data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings.”
It’s easy to hum, “we’ve only just begun” as Karen Carpenter once crooned, but that seems to be the reality for a country that struggles with post pandemic reactions, as well as vaccination fears.
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