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  • Writer's pictureNick Andriacchi

May Jobs Report

Employers added 559,000 in the month of April. This is definitely better than April, but still fell below economists’ expectations. Payrolls were expected to increase by 671,000, according to economists surveyed by Dow Jones.


The jobs miss comes as employers widely cite a labor shortage as a critical factor in why more hiring is not happening. Some have attributed the situation to generous unemployment benefits as well as child-care issues and continuing fears about the coronavirus as obstacles to filling the 9.3 million vacant positions according to the latest JOLTS report.



Analysis of the May Employment Report


· Temporary help broke its recent losing streak by adding 4,400 jobs in May. Staffers are reporting a record number of open job orders so the staffer that finds qualified candidates will reap the benefits.


· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons dropped to 10.2% from 10.4% in May.


· Previous months also were revised higher. The March total increased 15,000 to 785,000 while April’s revisions brought the total up by 12,000 to 278,000.


· Prime age labor force participation rate (ages 25-54) was flat again this month at 81.3%. While the number has improved since April, it is still down by 1.6% since February 2020, the last month before the pandemic started.


· The overall labor force participation was little changed at 61.4%. This is 1.9% below last February (2020) level.


· Average hourly earnings for all employees on private nonfarm payrolls increased by 15 cents to $30.33 in May, following an increase of 21 cents in April. Average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.60 in May, following an increase of 19 cents in April.


The data for the last 2 months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings.


· The average workweek for all employees on private nonfarm payrolls was steady 34.9 hours in May. In manufacturing, the workweek was up .1 to 40.5 hours, and overtime up .1 at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was down .1 to 34.3 hours.


· APD reported that 978000 jobs were created in May


Source: ADP, BLS, CNBC




JOLTS Report June 8, 2021


The number of job openings reached a series high of 9.3 million on the last business day of April, the U.S. Bureau of Labor Statistics reported today. Hires were little changed at 6.1 million. Total separations increased to 5.8 million. Within separations, the quits rate reached a series high of 2.7 percent while the layoffs and discharges rate decreased to a series low of 1.0 percent. This suggests that employees feel very confident about changing employers at this time.


Job Openings


On the last business day of April, the job openings level and rate increased to series highs of 9.3 million (+998,000) and 6.0 percent, respectively. The job openings series began in December 2000. Job openings increased in a number of industries with the largest increases in accommodation and food services (+349,000), other services (+115,000), and durable goods manufacturing (+78,000). The number of job openings decreased in educational services (-23,000) and in mining and logging (-8,000). The number of job openings increased in all four regions.


· This data continues to suggest and confirms what staffers have been saying, they have more open job orders than candidates.


Hires


In April, the number of hires changed little at 6.1 million. The hires rate was unchanged at 4.2 percent. Hires increased in accommodation and food services (+232,000) and in federal government (+10,000). Hires decreased in construction (-107,000), durable goods manufacturing (-37,000), and educational services (-32,000). The number of hires was little changed in all four regions.


Separations


· Total separations include quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations include separations due to retirement, death, disability, and transfers to other locations of the same firm.


· In April, the number of total separations increased to 5.8 million (+324,000). The total separations rate was little changed at 4.0 percent. The total separations level increased in retail trade (+116,000) and in transportation, warehousing, and utilities (+60,000). Total separations increased in the West region.


· In April, the quits level and rate increased to series highs of 4.0 million and 2.7 percent, respectively. Quits increased in a number of industries with the largest increases in retail trade (+106,000), professional and business services (+94,000), and transportation, warehousing, and utilities (+49,000). The number of quits increased in the South, Midwest, and West regions.


Net Change in Employment


· Over the 12 months ending in April, hires totaled 75.4 million and separations totaled 64.0 million, yielding a net employment gain of 11.3 million. These totals include workers who may have been hired and separated more than once during the year.


· While this number looks encouraging, this is the first number that encompasses the lowest point of the pandemic. There are still 7mm fewer people in the workforce compared with pre-pandemic.



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