May 2021 Jobs Report: U.S. Adds 559,000 to Payrolls

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Hiring accelerated in May, with the government reporting on Friday that employers added 559,000 workers, about twice the previous month’s gains.

The unemployment rate fell to 5.8 percent, the Labor Department reported.

As infections ebb, vaccinations spread and businesses reopen, the economy has started to regain its footing, but the path has not been smooth. Job growth bounced up and down in recent months, and may continue its uneven progress throughout the summer, analysts said.

“It’s probably going to be a bumpy ride from here till September,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

The labor force participation rate edged down slightly to 61.6 percent, evidence that many workers who dropped out of the work force during the pandemic have still not returned. That has been vexing to employers who have complained about a lack of response to help-wanted ads.

“We’re making good progress to getting back to full employment,” said Carl R. Tannenbaum, chief economist for Northern Trust, “but it will be a number of months before we reach that goal.”

The biggest job gains were in leisure and hospitality as people returned in droves to bars and restaurants. The education, health care and social assistance sectors also showed growth. Construction jobs shrank, a trend that some economists link to glitches in the supply chain.

Job postings on the online jobs site Indeed were up 27 percent at the end of May from their level in February 2020, before the pandemic hit.

Nearly half of small-business owners surveyed by the National Federation of Independent Business in May said they were struggling to fill slots. Many employers have blamed enhanced pandemic-related unemployment benefits for the shortage of workers, which has prompted 25 Republican-led states to withdraw from some or all of the federal jobless assistance programs in the coming weeks, months ahead of their expiration.

Most economists have pushed back against this argument and say the reality is more complicated. A lack of child care, continuing health concerns, low wages and competing priorities all probably play a larger role, they say.

“Is there a labor shortage?” Ms. Farooqi asked. “In my mind, absolutely not. There is a ramping-up effect, and that is going to persist for a little bit. You have to expect some frictions.”

At the beginning of the pandemic, job postings plummeted much faster than job searches, said Julia Pollak, a labor economist at the online jobs site ZipRecruiter. Now, there is a similar dynamic: Postings have picked up much more quickly than search activity.

“It’s just a matter of time,” said Ms. Pollak, who pointed out that many prime-age workers were only recently able to get their first Covid-19 vaccination.

She also said there was a mismatch between the type of jobs being offered and those being searched for. More than half of seekers want remote work, while only 10 percent of employers are offering that option.

The average monthly gain over March, April and May was about 540,000 positions. If that rate continues, it will be well into 2022 before the labor market returns to pre-pandemic levels.

The number of people who have been unemployed over a long haul — more than 26 weeks — dropped to 3.8 million, roughly 40 percent of the total.

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