Employment recovers in the US, but the worker shortage continues to weigh

The labor market recovered in the United States in October following the wave of the delta variant of the coronavirus and despite a persistent lack of labor.

The US economy added 531,000 jobs last month and the unemployment rate fell to 4.6%, the government reported on Friday.

The result is much better than expected, as analysts predicted on average the creation of some 400,000 jobs.

“The growth of employment was generalized” by sector, explained the Department of Labor in its statement.

Numerous activities added jobs in October, but the increase was particularly strong in the leisure and hospitality sectors, in professional and commercial services, in manufacturing, as well as in transportation and warehousing.

Job generation had fallen due to the delta variant of the coronoavirus. 483,000 jobs were created in August and 312,000 in September, according to data revised upwards and also released on Friday.

“The clouds are dissipating over the labor market,” congratulated Gregory Daco, an economist at Oxford Economics.

Disparity

Since May 2020, 18.2 million jobs have been created in the United States, but there are still 4.2 million to fill the gap left by the pandemic in a job market that was at its best all-time highs.

This general improvement hides, however, great disparities: the unemployment rate for black workers is double that of white workers (7.9%) (4%).

These figures are known when the House of Representatives meets this Friday to vote on two massive investment plans promoted by the Joe Biden government, for a total amount of around US $ 3 billion and that the president hopes will ensure growth and employment. long-term.

Paradoxically, employers are struggling to get employees, for lack of candidates in millions of vacant positions in restaurants, warehouses, delivery services, factories or day care centers.

Since the beginning of the pandemic, this phenomenon has been installed in the United States. Many people fear for their health, experience persistent problems caring for their children, while others seek early withdrawals.

The activity rate, that is, the percentage of people who work or seek employment among the economically active population, reached 63.3% before the crisis, but now it has stagnated at 61.6%. A leader of the Federal Reserve (Fed) recently warned that it is “unlikely” that this rate will return to the level before the pandemic.

Employees have a certain advantage in this context and many resign from their jobs, in a phenomenon known as “the great resignation”, an allusion to the “great confinement” of the pandemic, or the “great recession” of 2008-2009, and even the “great depression” of the 1930s. Resignations reached record levels this summer.

Wages go up

In the face of labor shortages, employers must compete with wage hikes, hiring bonuses, health insurance, and even flexible hours.

Average hourly wages in the private sector increased 4.9% in the 12 months to October, to US $ 30.96.

Ian Shepherdson, an economist at Pantheon Macroeconomics, expects more than a million new jobs between November and December “if the participation rate (of workers in the labor market) increases.”

The resumption of classes in September, which would liberate especially women after a year and a half of virtual classes and the expiration, on September 6, of the most generous unemployment benefits that had been overturned since the beginning of the pandemic, suggested a massive demand from workers.

But “it does not appear to have been the case,” Fed Chairman Jerome Powell noted on Wednesday.

People “leave their jobs in record numbers, but in many cases go back to work and get higher wages” at another company, he concluded.