U.S. job growth slows sharply in sign of hiring struggles

Source: Politico | May 7, 2021 | Associated Press

America’s employers added just 266,000 jobs last month.

America’s employers added just 266,000 jobs last month, sharply lower than in March and a sign that some businesses are struggling to find enough workers as the economic recovery rapidly strengthens.

The economic rebound from the pandemic recession has been so fast that many businesses, particularly in the hard-hit hospitality sector — which includes restaurants, bars and hotels — have been caught flat-footed and unable to fill all their job openings. Some unemployed people have also been reluctant to look for work because they fear catching the virus.

Others have entered new occupations rather than return to their old jobs. And many women, especially working mothers, have had to leave the workforce to care for children.

In addition, construction companies and manufacturers, especially automakers, have been left short of parts as a result of clogged supply chains and have had to slow production for now. Both sectors pulled back on hiring in April.

With viral cases declining and states and localities easing restrictions, businesses have added jobs for four straight months, the Labor Department said Friday. But as more people have begun looking for work, more people are being counted as unemployed: In April, the unemployment rate ticked up from 6% to 6.1% in March.

At the same time, optimism about the economic recovery is growing. Many Americans are flush with cash after having received $1,400 federal relief checks, along with savings they have built up after cutting back on travel, entertainment and dining out over the past year. Millions of consumers have begun spending their extra cash on restaurant meals, airline tickets, road trips and new cars and homes.

Most economists expect job growth to strengthen as more vaccinations are administered and trillions in government aid spreads through the economy. Even if another uptick in Covid-19 cases were to occur, analysts don’t expect most states and cities to reimpose tough business restrictions. Oxford Economics, a consulting firm, predicts that a total of 8 million jobs will be added this year, reducing the unemployment rate to a low 4.3% by year’s end.

From month to month, though, the gains in the job market could prove choppy, as Friday’s jobs report suggested.

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