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Jobs Data to Show Whether Worker Shortages Still Slow Hiring

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Jobs Data to Show Whether Worker Shortages Still Slow Hiring

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

The fading of the 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. 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.

That disconnect resulted in a sharp slowdown in hiring in April, when employers added far fewer jobs than economists had forecast and many fewer than had been hired in March.

Analysts 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 data provider FactSet. If the forecasts for May are accurate, that 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.

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