Jobs: A Return to Strength
Kiplinger’s latest forecast on jobs
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A sizable 559,000 thousand jobs were added in May, restoring the trend of strong gains as the economy opens up and more people are vaccinated. Restaurants accounted for a third of the month’s job creation, as restrictions on dining faded. They will continue to contribute the bulk of the gains this year, since the industry is still 1.5 million jobs below its prepandemic level. Recreation, hotels, education and health care also showed nice gains. Wages appear to be rising briskly for production workers.
Normality is slowing returning. Job growth should be strong the rest of the year. The number of teleworking employees declined to 16.6% in May from 18.3% in April. The number of unemployed people who were prevented from looking for work because of the pandemic dropped to 2.5 million from 2.8 million.
And yet: Total employment is still 7.6 million below its prepandemic level. At May’s rate of job gains, it will take 14 months to recover fully. Because 3.6 million people have left the labor force, there is some concern that a number of them have permanently retired or may not come back to look for work again. That could contribute to longer-lasting labor shortages.
The unemployment rate dropped to 5.8% in May with the pickup in hiring, though a decline in the labor force also contributed. The jobless rate is expected to drop to 5.0% or less by the end of the year.
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