WASHINGTON (AP) – With the economy growing rapidly as the pandemic reopens, many employers are desperate to hire. Yet the evidence suggests that as a group, the unemployed do not feel much urgency in finding work.
How these two trends balance out will likely determine the pace of the number of open positions employers can fill in the coming months.
On Friday, analysts expect the government to report that the economy created 675,000 jobs in June. This would be a substantial gain, but nowhere near as many hires as expected given the demand for labor and the record number of job vacancies.
In fact, some economists have estimated that monthly job growth would be at least double the three-month average gain for March, April and May – 540,000 – if there were no constraints on the number of workers. workers available to fill positions.
For June, the unemployment rate is expected to have fallen from 5.8% in May to a still high level of 5.7%.
Record number of posted job vacancies reached 9.3 million in April, according to the Ministry of Labor. The employment website Indeed said that vacancies have increased further since then.
As competition to retain and attract workers intensifies, especially in restaurants and tourist and entertainment venues, employers are offering higher wages, along with signing and retention bonuses and scheduling more flexible work. The proportion of jobs that promise a bonus has more than doubled Over the past year, Indeed found.
The supply of potential hires is hampered by various factors. Some unemployed people are still reluctant to take service jobs that involve interacting with the public because of COVID-19. About 1.5 million people, mostly women, are no longer working or looking for work because they had to look after children when schools and daycares closed. And an estimated 2.6 million older workers have taken advantage of expanded equity portfolios and home values to retire early.
It is also increasingly evident that people are re-evaluating their work and personal lives and are not necessarily interested in returning to their old jobs, especially those that offer modest wages. The proportion of Americans who left their jobs in April reached its highest level in more than 20 years.
Almost 6% of workers in an industrial category that includes restaurants, hotels, casinos and amusement parks left their jobs in April, twice the proportion of workers in all industries who did. made.
The growing number of people leaving their jobs, often for higher paying positions, means that even employers who have hired can struggle to maintain sufficient staffing levels.
A survey of manufacturers in June revealed numerous complaints among factory executives about labor shortages. Many said they are experiencing significant turnover due to what is known as “wage dynamics”: Other companies attract their workers with higher wages.
Karen Fichuk, managing director of Randstad North America, a recruiting and staffing company, said job site Monster, which Randstad owns, found that job postings jumped 40% from May to June. . Job searches, on the other hand, only increased by 4%.
“There is a big gap between supply and demand,” Fichuk said.
The struggle to fill jobs coincides with a rapidly growing economy. During the first three months of the year, the government estimated that the economy grew at a strong annual rate of 6.4%. In the April-June quarter that just ended, the annual rate would have hit a sizzling 10%.
And for the whole of 2021, the Congressional Budget Office estimated on Thursday that growth will amount to 6.7%. It would be the fastest calendar year expansion since 1984.
In the meantime, consumer confidence rose in June, according to the Conference Board, and is almost back to its pre-pandemic level. Americans also don’t seem daunted by recent price increases, with the percentage of consumers considering buying a home, car, or major household appliance all on the rise. Home prices increased the most in April in 15 years.
Factory output is also growing at a steady pace, in part because companies are investing more in industrial machinery, airplanes and technology.. These investments could make workers more efficient in the years to come and stimulate long-term growth.