Economic Recovery Continues for June 2021
The unemployment rate ticked down .3% last month bringing the total number of unemployed persons down by nearly 500k, which is an improvement over the somewhat disappointing jobs report released in May. The number of people seeking unemployment aid has dropped for 5 straight weeks now.
Still, it’s not all good news in this month’s economic release from the Bureau of Labor Statistics given that the number of unemployed persons currently still includes more than three and a half million more people than before the pandemic.
As another example, one of the main stories of this report is that the collective group of people who are either currently working or currently looking for work fell last month after three consecutive months of increases, which relates directly to the oft-reported hiring woes that many businesses are experiencing as they attempt to staff up their operations in response to the surprisingly quick pace of reopening that caught many off guard.
Of course, there are many workers who have chosen to retire during the pandemic and aren’t planning to return to work at all, and there are also workers who have not yet returned to the labor pool because of health concerns or because of practical concerns such as the lack of child/dependent care services that would enable them to spend most of their days on the job (these latter two non-retiring groups are made up of approximately 2.5 million people).
Beyond these groups, however, there is evidence to suggest that there are many workers who are still evaluating and comparing multiple job opportunities in a variety of industries before returning to work and who are not necessarily planning to go back to the same job or even the same career/industry in which they worked prior to the pandemic.
To attract these workers that are shopping around for new jobs, some companies have tried incentives like higher starting pay or a weekly (or even daily) pay schedule, while many state governments have adopted different means toward achieving the same ends and are encouraging people to reenter the workforce by way of reduced unemployment benefits.
Based on the data in the report, there’s reason to believe that very modest starting pay increases even offered by some of the biggest US employers have yet to significantly motivate the target audience among the would-be workforce, but it remains to be seen whether the loss of government aid will have its intended effect.
Another important story told by this month’s BLS release is the percentage of employees who have worked remotely due to pandemic-related reasons over the previous four weeks, which is down by nearly 2% month to month in continuation of the trend after dropping by about 2.5% the month prior.
Similarly, while as of last month there were still nearly 8 million workers who were unable to work at some point because their employer had shut down or lost business because of the pandemic, that number is down more than 15% over last month, which goes to show just how quickly the economic reopening is occurring and is still very much in progress.
Other figures of note include temporary layoffs, which are down to 1.8 million - just 10% of the 18 million temporary layoffs that occurred at the height of the pandemic, which is a nice round milestone to mark the progress.
On an industry level, leisure and hospitality saw the biggest improvement with nearly 300k new jobs added, which is unsurprising given how disproportionately that industry was hit at the outset of and throughout the pandemic. Nearly two-thirds of those leisure and hospitality jobs went to foodservice and drinking establishments. It should also be noted that this industry is still down some 2.5 million jobs from pre-pandemic figures, however.
Employment in the education sector also made significant gains with the continued reopening of schools, while modest job increases were registered in the healthcare, information, transportation, and warehousing, and manufacturing industries - displaying solid breath across sectors at this stage of the rebound.
Taking everything into account, while this jobs report may qualify as ‘great’ or even ‘abnormally good’ relative to expectations at least, it certainly would fall under the general descriptor of ‘not bad’ and for where we are on the pandemic recovery timeline, ‘not bad’ is not necessarily a bad place to be.