According to the new monthly employment report published Friday by the Bureau of Labor Statistics, the US economy added a disappointing 266,000 workers last month, amid common expectations that the figure would top 1 million.
The unemployment rate increased from 6% to 6.1 percent, which was higher than expected but also lower than the record high of 14.8 percent in April, which was the highest level since the Great Depression.
After months of restrictive policies, mass vaccines have prompted Americans to dine out, take holidays, and go out to supermarkets, the widely awaited study was predicted to show solid employment growth, with some observers also forecasting employment losses above the 2 million level.
“Restarting an economy after a pandemic would be a bumpy operation,” Treasury Secretary Janet Yellen said at a White House press briefing on Friday afternoon. She cited shortages in semiconductor chips and lumber as reasons for the low headline work figure but dismissed any notion that it constituted something other than growth.
“I understand how unpredictable it is. Never consider a single month’s worth of data to be indicative of a larger trend.”
“This may be one of the most depressing career forecasts ever,” said Nick Bunker, the economic analysis analyst at Indeed Hiring Lab. “To get back to where we were before the pandemic, the labor market has to add 8.2 million workers, not even the jobs that would have been generated if the pandemic had never happened. Any month that employment growth does not intensify, we fall further behind.”
According to data tracked by NBC News, widespread vaccination has fueled a return to normalcy in the United States, with more than 107 million people fully vaccinated. As supermarkets, pubs, and restaurants expand space, this has resulted in increased customer trust, which is fueling the spending boom.
According to the Centers for Disease Control and Prevention, the worst of the Covid-19 pandemic may be over by July if vaccine rates remain elevated and people use masks and keep their distance where required.
Despite the disappointing headline figure, Sameer Samana, senior global market strategist at Wells Fargo Investment Institute, said the labor participation rate and wage growth were both better than predicted.
According to some economists and employers, President Joe Biden’s relief program, which included stimulus checks and expanded pandemic incentives for the unemployed, is discouraging some people from returning to their old employment or looking for new ones, resulting in labor shortages.
Unemployment insurance will total up to $600 a week, or $16 per hour, which is more than many entry-level workers cost. To retain jobs, some companies have resorted to giving cash signing incentives.
Biden was asked if increased unemployment payments were keeping employees at home “No, it’s not so. Nothing quantifiable, “At a press briefing at the White House on Friday afternoon.
Some economists argue that the special pandemic subsidies are sufficient to keep food on the table for staff who must stay at home to assist their children with remote education or to assuage fears of catching the virus.
Around 16 million people are currently receiving unemployment payments, with 12 million of them on federal pandemic emergency plans that are set to expire in September.
“As critical as any economic thread being watched amid the reopening tale is the healing of the labor market, which includes a decline in the number of unemployed and those finding and getting jobless assistance “Mark Hamrick, a senior economist at Bankrate, agreed. “Yes, there is a lot of confusion surrounding all of this, but it has to be interpreted in the light of overall improvement.”