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The U.S. economy added 390,000 new jobs during May, according to data from the Bureau of Labor Statistics. This is below average growth of 552,000 per month over the last twelve months.
The unemployment rate remains at 3.6% and is slightly higher than during February 2020, before the pandemic when it hovered around 3.5%.
From April last year to this current year, American wages have grown by 5.5%, however, inflation which stands at 8.3% has swallowed up the increase of workers’ wages who have seen their savings squandered by inflation in recent months. As of May, the average American earned a wage of $34.1 an hour.
The labor market is in a time when demand for jobs exceeds supply, which has caused an unprecedented recovery in employment, but has also left a lot of vacancies unfilled or to be filled by people who will resign for a few months.
Despite the fact that the United States has experienced the strongest job recovery since 1939, companies simply do not have enough workers and in some cases have had to pull back on investment projects for lack of people to execute them.
Competition for personnel has caused salaries to rise and consequently there are massive defections in some sectors where people change jobs quickly, as the supply of new jobs abounds. In April there were more than 11.4 million job openings.
One of the biggest job creators is the warehousing and transportation sector, which already has 709,000 more employees than in February 2020, reflecting the growth of e-commerce in the United States, which is increasingly gaining a dominant position over net sales.
Professional services such as financiers, consultants or lawyers have also experienced a hiring boom and today have 809,000 more professionals than during 2020 in the months prior to the pandemic.
In its latest report, the Federal Reserve (FED) stated that the hiring boom in the United States may be coming to an end in the next few months. Some technology companies such as Netflix or Twitter have already announced that they plan to hire new staff, and others such as Tesla are planning to lay off some of their staff in the coming months.
A recent survey of U.S. manufacturing companies indicates that industrial employment fell during the month of March, however, companies plan to continue hiring in the coming months.
In the face of worker shortages, some companies have backed off plans to scale their business. According to the latest survey by the FED, during the summer some restaurants will cut their service during the busiest hours of the day due to staff shortages.
The premature retirement of millions of people during the pandemic has left a lot of jobs that companies will not be able to re-fill, as the number of workers has simply declined. The labor force participation rate in May was 62.3% while in February 2020 the participation rate was 63.4%. That is, about 2.4 million Americans retired in recent years.
Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica