Much of the press is focusing on the large number of jobs created in May, 559,000. But it is actually 112,000 short of expectations. And remember we are coming out of last year’s massive pandemic-induced slowdown.
According to the Wall Street Journal, employers are still struggling to hire:
U.S. employers added 559,000 jobs in May and the unemployment rate fell to 5.8%, in a pickup of the labor market’s recovery from the pandemic amid signs that businesses struggled to fill job openings.
Last month’s gain represented an improvement from April, when the unemployment rate was 6.1% and the economy added a revised 278,000 jobs, a gain much smaller than economists had forecast.
Economists had expected 671,000 jobs added and a 5.9% unemployment rate in May.
Job gains in May were led by leisure and hospitality, which added 292,000 jobs, education, and healthcare, the Labor Department said.
The faster pace of hiring came as several factors are propelling a burst of economic activity. More Americans have become vaccinated against the coronavirus, and state and local governments have eased restrictions on businesses as Covid-19 cases have declined and as the federal government has relaxed its pandemic guidance. Those factors, along with federal pandemic aid, have prompted a pickup in spending, particularly at services businesses, which in turn is stoking labor demand.
Employment in May was still down by about 7.6 million jobs compared with pre-pandemic levels, and 9.3 million people were unemployed and potentially available to work.
The unemployment rate fell because more Americans who were searching for work found jobs, but the number of people in the labor force held nearly steady, suggesting that ample open jobs and some improvement in wages didn’t draw more workers off the sidelines in May.