Newly Released Data Raises Hopes For Big Figure In Friday’s Closely Awaited Job Report

Positive labor market statistics reported Thursday bolstered growing optimism that the economy is on the mend, with weekly initial jobless claims falling below 400,000 for the first time since the coronavirus outbreak stretched the country, Awaited Job Report.

According to Labor Department figures issued Thursday, the number of first applications for unemployment benefits decreased to 385,000 for the week ending May 29.

On Thursday, payroll processing business ADP released better-than-expected figures, suggesting that 970,000 workers were recruited in May, the most since June 2020. Economists expected that 680,000 people will be hired in May.

The most recent employment data add to the prevailing confidence ahead of Friday’s carefully awaited monthly jobs report, with Dow Jones analysts forecasting growth of 674,000 jobs.

The higher number of vaccinated Americans and more widespread reopenings, according to Mark Hamrick, senior economic analyst at Bankrate.com, “give us cause to expect the economic recovery will continue on track in the coming months.”

The increase in immunizations, according to Aaron Sojourner, a labor economist and associate professor at the University of Minnesota, is a driver for employment creation. “This increases labor supply because more Americans are protecting themselves, their families, and their neighbors from Covid health hazards that were formerly caused by work,” he added. “Vaccinations also increase labor demand, allowing consumers to take advantage of in-person services.”

Vaccinations increase labor demand, allowing consumers to enjoy in-person services in a safe manner.

Paychex’s vice president of risk management, compliance, and data analytics, Frank Fiorille, said that data from the company’s 350,000 small-business clients shows that some companies are increasing wages to get workers back into the workforce.

Weekly salary has increased by about 10% in the leisure and hospitality industry, which has been one of the most impacted by the epidemic, according to Fiorillo. “We’re seeing a significant increase in pay in that industry. “It appears that these companies are having to pay them extra to get them back to work,” he added.

According to Nick Bunker, an economist at Indeed.com, these firms have lately increased their hiring efforts. “Categories that have had their level grow the most lately have been in the particularly pandemic-constrained areas of the labor market,” he said, adding that job advertising is running roughly 26% higher than pre-pandemic levels across all sectors.

Bunker said of the impending labor market data, “In light of last month’s data, this month’s is critically essential to give us a sense of whether last month was a blip or a hint of a deeper narrative in the job market.”

While economists — and authorities — argue that there is enough uncertainty in the statistics for any one month to be an outlier, a second major miss would be a red flag for investors and politicians alike, signaling that the path to post-pandemic normalcy isn’t always a straight line.

CFRA Research’s chief investment strategist, Sam Stovall, said he’ll be keeping a watch on manufacturing figures. Last month, the industry shed 18,000 jobs, and more employment losses might signal that supply chain bottlenecks and raw material or component shortages are stifling economic growth. “It’s not that people don’t want to work or that they don’t want to boost output. Because of supply problems, they don’t have the resources to do so,” he explained.

“If we continue to see reduced numbers, I believe it is due to reports of schools not being completely reopened and parents having trouble finding childcare… as well as those relating to eldercare. According to William Rodgers, professor of public policy and chief economist at Rutgers University’s Heldrich Center for Workforce Development, “these are still fairly important factors for people opting not to come back into the labor field.” He answered, “We’re not out of the woods yet.”

“If there’s any type of headwind, it’s that small enterprises are having a hard time filling jobs,” Fiorillo explained.

According to Stovall, a second monthly report of lackluster employment increases might have serious repercussions for the Biden administration. “I believe people will wonder what’s going on here if we come in weaker than predicted again,” he added. A miss would almost probably renew the discussion over the increased unemployment benefits of $300 per week. The federal program expires on Sept. 6, but 25 governors have begun to wind down their state programs, with some concluding as early as June 12.

Republicans in Republican-controlled statehouses and Congress claim that more generous unemployment benefits are keeping Americans off the job market. “I believe it would raise the rhetoric and, more importantly, it would likely thwart the present administration’s efforts to offer an extra stimulus,” Stovall said.

Other economists have identified a slew of other roadblocks to people returning to work. According to economists, the fear of catching Covid-19 is still a reality, especially in locations where local immunization rates are low.

“Workers’ expectations have been drastically altered. There has been a tally.”

Another stumbling block is a skills mismatch, particularly among lower-skilled and less-educated workers. “Employers will have to enhance remuneration in order to entice workers back. “They’ll almost certainly have to complete some job training,” Rodgers added. He went on to say, “It’s more structural difficulties.”

Perhaps the most significant of these structural obstacles, according to Hamrick, is that many companies have been reluctant to recognize the extent to which the epidemic profoundly impacted millions of Americans’ connections with their work and to recalibrate properly.

“Now, when individuals are deciding where to work, they’re asking things that they wouldn’t have asked in the past, such as, is there harsh shift work involved? Workers’ expectations have shifted dramatically,” he added. “There has been a reckoning in terms of resetting expectations and standards, and there is no one-size-fits-all solution.”

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