June 17, 2021

While a disappointing jobs report, job gains in leisure and hospitality respond to increased demand in April

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A disappointing 266,000 jobs were added in April, and March’s employment number was revised down...

A disappointing 266,000 jobs were added in April, and March’s employment number was revised down by 78,000. While the overall growth was far below expectations, leisure and hospitality gained 331,000 jobs, a sign that increased demand has led to significant gains in employment in that sector.

The unemployment rate ticked up in April to 6.1%, in large part due to workers beginning to return to the labor force in search of jobs. The labor force increased by 430,000 workers in April, the largest gain in six months. Likely in response to improving public health metrics and increased expectations of job opportunities, more and more workers are actively returning to the labor force in search of work. While wage growth will be the leading indicator of employers having to bid up wages to attract workers, the significant rise in the labor force runs counter to anecdotal claims of labor shortages.

As of the latest data, employment is still down 8.2 million jobs from its pre-pandemic level in February 2020. But, if we include the likelihood that thousands of jobs would have been added each month over the last year without the pandemic recession, the jobs shortfall is more likely in the range of 9.0 and 11.0 million. Now is not the time to turn off vital relief—including expanded unemployment benefits—to workers and their families.

Additional key points in today’s report:

  • The Black unemployment rate rose slightly to 9.7%, making Black workers the only racial and ethnic group (as a whole) to experience worsening metrics. Meanwhile, the white unemployment rate fell to 5.3%. Clearly, these two groups are experiencing a very different labor market.
  • Long-term unemployment—those unemployed 27 weeks and over—fell slightly in April, while the increase in the unemployment rate was due to increases in those unemployed less than five weeks. Among those long-term unemployed, improvements in those unemployed 27-51 weeks were largely offset by increases among those unemployed 52 weeks or longer.
  • Only 18.3% of the workforce teleworked in April. As the economy absorbs more leisure and hospitality workers, I expect this number to keep falling. This also means that over 80% of the workforce is going to work in-person, risking their health and the health of their family members as the pandemic continues to spread.
  • In addition to the 9.8 million officially unemployed in April 2021, we must add three more groups of economically hurt workers: those unemployed but misclassified as employed or not in the labor force (3.3 million), those who dropped out of the labor force (4.4 million), and those employed but experiencing a cut in pay and hours (4.6 million). Taken together, 22.1 million people are economically hurt in the COVID downturn.

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