The May Jobs Report was released last Friday 6/4. Employers added 599,000 jobs, which is encouraging news after April’s figures disappointed. However, focus was mostly on a different metric: the number of vacant job openings reached 8.1 million during the month – a record high – signaling that this post-COVID labor market is far from normal.
·Overall unemployment rate decreased to
5.8%from
6.1% in at the end of April
·The rate for college-degreed workers aged 25+ dropped to
3.2%from
3.5%in April
·
599,000jobs were added in May, with professional and business services accounting for
35,000 of those positions
·Revisions to March and April figures showed that
1,063,000jobs were added during those two months, resulting in a net positive adjustment of
27,000compared with the figures that were originally reported
It’s becoming increasingly clear that we’re in the midst of a labor supply crunch. The labor force participation rate dropped this month to 61.6%, and employees are working longer on average (the average work week is up to 34.9 hours, close to the record of 35 hours that was set in January). Both of these signs indicate that employees are reluctant to rejoin the labor market and that employers are struggling to add headcount. This
U.S. Chamber of Commerce Report said that 90% of employers cite the lack of available workers as the top factor slowing the economy in their area, and has a lot more detail on the current labor shortage.
However, it’s not all doom and gloom. The number of long-term unemployed – on the rise since early 2020 – fell by 431,000. This is an important statistic; there is broad consensus that the longer an individual is out of work, the harder it is to find work. Long-term employment leaves severe economic scarring, so avoiding a prolonged long-term bout of unemployment is critical for a full recovery. Additionally, the 5.8% unemployment rate is actually right in line with historical averages. From 1980 – 1999, the average unemployment rate was 6.5%, and from 2000 – 2019, the average was 5.9%. In other words, although we may not be experiencing “full employment” just yet, we are out of “unprecedented” territory.
As a parting note, I will be taking a short leave of absence from Robert Half during June and July, returning early in August. I’ll be doing an 8-week internship with
Analysis Group, an economic consulting and strategy firm. I’ll resume this monthly labor market newsletter upon my return in early August.
In my absence, should you need assistance from a personnel standpoint – whether it’s direct hire, contract-to-hire, contractor or consultant – my team would be more than happy to help. Please contact Matt Prizinsky, Division Director of our Management Resources team in Columbus, OH at [email protected].
All the best,
Hunter
Hunter Lent, CPA
Client Service Director
Phone: (419) 297-5841
Click here to book a meeting with Hunter Lent
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