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Monday, December 05, 2022

Explainer: workers return and 4 other work-report charts

WASHINGTON ( Associated Press) – Solid hiring, strong pay benefits and sharp price increases are pulling more Americans into the workforce. If this trend continues, it will mean long-awaited relief for businesses desperate to fill jobs.

The number of people working or looking for work still hasn’t fully recovered from the mass layoffs following the explosion of COVID-19. But Friday’s jobs report showed That it’s clearly heading in that direction. Continued growth in people looking for jobs could eventually quell last year’s sharp wage gains, ease concerns at the Federal Reserve about rising inflation and possibly put the economy on a more sustainable growth path.

If so, it would represent an impressive outcome given the raft of economic uncertainties threatening to curtail growth, from an inflation spike to the still-damaging effects of COVID from Russia’s invasion of Ukraine to the Fed. The interest rate range of just started has got spoiled. growth, which is shaping up to be the most aggressive in years.

Friday’s government jobs report for March also showed that businesses and other employers added 431,000 jobs last month and the unemployment rate fell to 3.6%. That rate is only slightly above the pre-pandemic unemployment rate of 3.5%, the lowest in five decades.

Here are five key findings from the Jobs report:

Labor shortage is getting easier

As the pandemic hit the US economy in the spring of 2020, putting 22 million people out of work, many Americans seemed reluctant to return to low-paying jobs in restaurants, hotels and other services businesses, especially when COVID-19 Was still angry. Employers posted millions of jobs that were left unfinished.

Now, however, with wages rising at their fastest pace in decades and the continued fading of COVID, Americans are returning to the workforce at the fastest pace in 20 years.

This can be most clearly seen among the so-called key age workers aged 25 to 54, whom economists follow because they mostly exclude students and people who are likely to retire.

A full 80% of people in that age group now have jobs, which isn’t too far from the pre-pandemic figure of 80.5%. In April 2020, this figure had gone down to 70%.

“We are within a significant margin of pre-pandemic levels,” said Nick Bunker, an economist at In fact Hiring Lab. “We can get there in a few months.”

women returned to the workforce

With schools reopening and child care centers recovering, women have also accelerated their return to the workforce. During the pandemic, women – especially mothers – were more likely to either lose jobs or quit and drop out altogether.

Yet the trend quickly reversed in March. Of the 418,000 people who found work or started looking for jobs that month, nearly three-quarters were women. The proportion of women who either have a job or are looking for one rose to 76.5% in March, up seven-tenths from the previous month and not too far from the pre-pandemic level of 76.9%.

The same figure for men is much higher at 88.7%, but it is also almost half a point below where it was before COVID.

Higher wages will keep the Federal Reserve on edge

With consumers increasingly spending and the economy growing at its fastest pace in nearly four decades, businesses are desperate to fill record levels of open jobs. Companies large and small have raised wages to find and keep workers.

In March, the average hourly wage, excluding supervisors, jumped 6.7% from a year earlier, matching the annual pace in January and February. They are the strongest annual gains in four decades, excluding the two months distorted by the pandemic.

While such healthy wages are great for workers, they are fueling the biggest inflation rate since the early 1980s. Until companies find ways to make their operations more efficient, they will pass on at least some of their higher labor costs to customers in the form of higher prices.

On a monthly basis, wage gains have slowed over the past three months, Bunker said, suggesting that wage increases may be peaking.

Still, the Fed is widely expected to raise its short-term benchmark rate by one and a half percent in both its May and June meetings. They will be the Fed’s first half-point rate hikes since 2000, and will be a sign of how quickly Fed Chair Jerome Powell wants to begin cooling the economy to control inflation.

Most industries have acquired all their jobs

Six of the 11 major industries in the US economy have regained all of the jobs lost during the pandemic recession. Most other industries are close enough.

One exception: leisure and hospitality, which includes restaurants, bars, hotels, amusement parks and other forms of entertainment. Leisure and hospitality, one of America’s largest employers, still has 1.5 million fewer jobs than before the pandemic, a decline of 8.7%.

The changes also provide a glimpse into the growth of the economy over the past two years. The industry with the biggest percentage gains has been transportation and warehousing, which now has 10% more jobs than before the pandemic. This growth reflects the huge growth in online shopping over the past two years.

The racial gap has narrowed, though still persists

The nation’s most stubborn racial unemployment gap – that between black and white workers – narrowed slightly in March. Unemployment dropped from 6.6% to 6.2% for black Americans, while it decreased from 3.3% to 3.2% for whites. That three-point difference is smaller than a year ago, when unemployment for black workers was 9.5%, and it was 5.3% for whites.

Yet, unemployment for black workers is almost twice as high as for whites, A sustainable ratio that William Darrity, an economist at Duke University, has called “a powerful index of discrimination”.

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