“This has been an extraordinary job recovery, but that kind of growth can’t go on 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’s hard to find people to get back into the job market, even if you’re paying higher salaries.”
In April, the biggest gains were concentrated in leisure and hospitality, manufacturing, transportation and warehousing, as companies tried to keep pace with steady consumer demand for goods and services.
The rapid recovery in the labor market has been a cornerstone of the recovery from the pandemic and a major political asset of the Biden administration, although the workforce has remained depressed due to a number of factors, including retirement and care. Employers hit a record opening of 11.5 million in March — nearly double the number of job seekers, according to a Department of Labor report released earlier this week.
This continued strength has enabled the Federal Reserve to take aggressive action to curb inflation. central bank raise interest rates This week, it increased by half a percentage point, the largest increase since 2000, in hopes of calming the economy without plunging it into recession.
“We need to do everything we can to restore stable prices as quickly and effectively as possible.” Federal Reserve Chairman Jerome H. Powell Wed said. “We think we have a good chance of doing that without a huge increase in unemployment or a really sharp slowdown.”
However, there are signs of mounting uncertainty. US economy unexpectedly shrunk In early 2022, due in large part to widening trade gaps and lower inventory purchases. Inflation remains at its highest level in 40 years. Stock prices – which have jumped to record levels during the pandemic – have plummeted in the past week, amid renewed fears of a possible recession this year or next.
“We’re at a strange point in this cycle right now, where it’s not entirely clear which direction things are going,” said Liz Ann Saunders, chief investment analyst at Charles Schwab. “It’s obviously a volatile market environment, and we’re starting to see some pullback in different ways.”
Major companies, including Wells Fargo, have begun laying off workers in recent weeks, and others such as Amazon have said they “Staff too much,” More confusion over job prospects. Overall, US employers announced more than 24,000 jobs in April, a 14 percent increase from the previous month, according to numbers released this week by outsourced recruitment firm Challenger, Gray & Christmas. (Amazon founder Jeff Bezos owns The Washington Post.)
In all, the labor market still lacked 1.2 million jobs before the pandemic, although many sectors have already made up for recent losses. Transportation and warehousing, for example, and professional and commercial services have about 700,000 more employees than in February 2020.
Restaurants, bars and hotels are struggling to catch up after widespread layoffs early in the pandemic. The leisure and hospitality industry is adding new jobs quickly, although it is still 1.4 million jobs, or 8.5 percent of the workforce, from pre-pandemic levels.
The leisure and hospitality sector led the recovery but there was some slowdown. “Wages are not as strong as in other industries, and people have been reluctant to return to and stay in those jobs,” said Nella Richardson, ADP’s chief economist. “This is where you see the highest vacancies and highest turnover, in terms of resignations.”
Lou Salama, who owns 10 sandwich stores in Jacksonville, Florida, says he is not finding enough workers to keep the business running smoothly.
He starts closing two hours early, at 6pm, and often has to close parts of his restaurants even earlier if he’s understaffed. He raised wages to about $12.50 an hour and began offering weekly and monthly bonuses to his 150 employees, even though he’s still short of about 50 workers.
“It is very difficult to find help, and even more difficult to maintain,” said Salama, who owns Sheik Sandwiches and Subs. “The salary is at an all-time high, we are offering benefits and bonuses, but honestly, it hasn’t made any impact. It just feels impossible.”
But for many workers, a tight labor market continues to prove beneficial.
Leah Koch, who lives near Chicago, recently left her 11-year job in the radio industry to take a position at a digital marketing firm. It all happened very quickly: Koch applied in early April, was interviewed a week later and received a job offer less than 24 hours after that.
“It was so easy that I was like, ‘Wow, it was meant to be,'” the 41-year-old said. “I feel alive again.”
Koch makes 33 percent more than in her previous job, having not received a raise in eight years.
“There was no overtime pay, but they kept piling on my plate,” she said. “Finally in January, I said, ‘I have to find something new.’ And I’m so glad I did.”
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