Jobs data to show whether worker shortages still slow hiring

Worker shortage to ‘diminish’ as more states reopen, end unemployment benefits: Economist

Stifel chief economist Lindsey Piegza argues pressures in the labor market will diminish as more states fully reopen and end federal unemployment benefits.

The most watched economic report of the month will be released Friday morning.

With U.S. businesses scrambling to fill millions of jobs as the economy reopens much faster than many had expected, the jobs report for May will help show whether their efforts are succeeding.

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Economists have predicted an improvement for May, with 650,000 jobs added, compared with April's surprisingly tepid gain of 266,000. The unemployment rate is projected to fall from 6.1% to 5.9%, according to Refinitiv.

The gain would still be a slower hiring pace than the 1 million jobs a month that many economists had envisioned in early spring. The economy still has 8.2 million fewer jobs than it did before the pandemic struck.

The fading of the coronavirus pandemic has released substantial pent-up demand among consumers to eat out, travel, shop, attend public events and visit with friends and relatives. But it has also produced a disconnect between companies and the unemployed.

JOBLESS CLAIMS HIT PANDEMIC LOW, PRIVATE-SECTOR PAYROLLS SURGE PAST EXPECTATIONS

 Businesses are rushing to add workers immediately. Yet many of the unemployed are either seeking better jobs than they had before the pandemic, still lack affordable child care, worry about contracting COVID-19 or have decided to retire early.

Other positive labor-related reports came out this week ahead of Friday's headline number.

Data released Thursday showed 385,00 Americans filed for first-time jobless benefits in the week ended May 29, the lowest amount since the pandemic began in March 2020. Separately, the ADP National Employment Report found private-sector payrolls grew by 978,000 workers last month. Both reports topped Wall Street's expectations,

THESE 5 STATES HIT HARDEST BY LABOR SHORTAGE: CHAMBER OF COMMERCE SURVEY

The economy is recovering at a healthy pace, and companies are still seeking workers: Job postings in late May were nearly 26% above pre-pandemic levels, according to the employment website Indeed. Government data shows that posted jobs have reached their highest level on record dating back to 2000.

Many businesses blame a $300-a-week federal unemployment benefit for discouraging some of the jobless from taking work. Republican governors in 25 states have responded by cutting off that benefit prematurely, starting this month, before the benefits are scheduled to end nationally on Sept. 6.

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Consumers are opening their wallets. In April, they increased their spending after a huge gain in March that had been fueled by the distribution of $1,400 stimulus checks. With more Americans feeling comfortable about staying in hotels and visiting entertainment venues, spending on services jumped.

The Associated Press contributed to this report.

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