Nearly half of small business owners reported having unfilled jobs in May, a continuing sign that workers are still staying away from their jobs in large numbers. Nevertheless, there were 559,000 jobs created in May, up from a revised 277,000 jobs in April. The unemployment rate dropped from 6.1 percent to 5.8 percent.
The 559,000 jobs were in line with predictions of 571,000. But economists were seeking to dampen expectations after being wildly wrong in April. Then, the predictions were for nearly a million new jobs. The revised figures for April out today don’t come close to that at 277,000.
More significantly, the labor participation rate — a closely watched gauge of economic performance — dropped in May from 63.3 to 61.1 percent. The drop could reflect fewer people looking for work despite “Help Wanted” signs all over town.
Economists have pointed to a variety of other factors that could be contributing to constrained job growth. Those issues include some workers’ concerns about contracting the coronavirus, child-care responsibilities preventing some parents from returning to work, and a federal supplement for recipients of unemployment benefits.
Nick Bunker, economic research director for North America at the jobs site Indeed, said those constraints are likely to ease in coming months as additional Americans become vaccinated, schools more fully open and the federal supplement ends broadly in September. Taking those factors together, the labor market could reach an inflection point in early fall because more workers will likely be available, Mr. Bunker said.
“It’s a bit like a rocket where takeoff has been slightly delayed, but takeoff will still happen,” he said.
There is tremendous pent-up energy and demand in the economy but with many states still restricting some industries such as restaurants and bars, and the government still trying to scare people about the pandemic, economic activity is still suffering.
That fear leads to people not going back to work and even parents holding their kids back from attending in-person classes because they don’t want to get sick. And there’s little reason to go back to work as long as Joe Biden is paying them to stay home.
A number of U.S. states, all with Republican governors, have said they would end the federal supplement to unemployment benefits earlier than the scheduled expiration. Some of those states are also offering incentives for people to return to the workforce.
Preliminary findings from the Federal Reserve Bank of San Francisco suggest the extra benefits had a small but noticeable effect on job decisions.
It doesn’t help that much that 63 percent of Americans have received at least one dose of vaccine — not as long as the CDC continues to treat vaccinated people the same way they treat unvaccinated people. If the government says the vaccine may not keep you safe, why even bother?
We’re at the tail end of the pandemic and the government is refusing to allow people to live their lives. But there are already signs that most Americans don’t care what the government says and will go about their business accordingly.