Marin Independent Journal

Disappoint­ing US hiring report came as a surprise

- By Christophe­r Rugaber

The anticipati­on for the U.S. jobs report for April, released Friday morning, was high.

Most experts agreed that after a yearlong pandemic, tens of millions of layoffs and widespread disease and death, a likely second straight month of nearly 1 million added jobs would send a clear signal: The economy was bounding back toward full health after a devastatin­g recession.

Instead, the report was a clunker. To nearly everyone’s surprise, employers added a comparativ­ely paltry 266,000 jobs, down drasticall­y from a gain of 770,000 in March, which itself was revised down from an initially much higher figure of 916,000.

Once the shock wore off, economists grappled with a host of questions, starting with: What happened last month — and why? What did the tepid hiring gain say about the state of the job market and the economy? And is there really a labor shortage?

Q A: So why was the job gain so low?

desires to travel, eat out, and shop. Sales of new cars and homes are still rising. Yet because the economy is rebounding faster than almost anyone thought it would, many companies were caught flat-footed. Surging consumer demand has caused widespread shortages of parts and raw materials, including lumber, semiconduc­tor chips and even chicken wings.

Now, workers themselves can be added to the list of shortages. Companies are advertisin­g more jobs than they were before the pandemic, when the unemployme­nt rate was a 50-year low of 3.5%. So they clearly want to add workers. Yet hiring stumbled in April because many employers couldn’t attract as many as they needed.

: The broadest explanatio­n is that any time an economy has to recover from a severe shock, it isn’t likely to proceed smoothly. But the pandemic may be causing a broader reshaping of the economy as companies, workers and customers adapt to a new normal. Month-to-month job gains will be choppy. In fact, the swiftness and strength of

A the recovery so far are themselves : Several things: Millions part of the cause. of people avoided

Consumer confidence has looking for a job in April because surged, and many companies they feared becoming report soaring demand infected by the coronaviru­s, as Americans unleash pentup according to a government


: Why aren’t employers able to hire more easily?

Asurvey. About 2 million women have stopped looking for work since the pandemic, likely because


of disruption­s in schooling : Will all these issues and child care. In April, all continue to hold the net job growth went to down hiring in the coming men; women as a group lost months? jobs. In addition, constructi­on

A companies and factories : It’s possible. But most have been left short of economists say they parts because of clogged think April’s slowdown will supply chains and have had prove temporary. Daniel to slow production. Hiring Zhao, senior economist at weakened in both sectors Glassdoor, an employment in April. website, notes that Google

And some businesses searches for jobs had declined complain that a $300-aweek from mid-March and federal unemployme­nt only rebounded in late April benefit, provided in — after the government had President Joe Biden’s $1.9 compiled the jobs data for trillion rescue package, has last month. meant that many unemployed The average workweek people can receive rose last month, evidence more income from unemployme­nt that companies are asking aid than from their employees to work their former jobs. more and will likely need Jan Riggins, who manages to add workers soon.

Q two Express staffing And the number of firsttime : If companies can’t offices in Fort Worth, Texas, applicatio­ns for unemployme­nt find more workers, said that some job seekers aid has dropped why not offer higher pay? have turned down offers steadily in the past month, that paid less than they a sign that layoffs are slowing. were receiving from benefits. More people are returning She said health concerns to the job market are also a factor, noting to look for work again: that the open jobs that About 750,000 people have allow working from home, rejoined the workforce in

such as taking customer service calls, have been quickly filled. the past two months. All of that should help employers fill more jobs.


: Are unemployed people really avoiding jobs for the extra $300 a week in federal jobless aid?


: This is a contentiou­s question. One academic research paper has found that for every 10% increase in unemployme­nt benefits, job applicatio­ns decline by nearly 4%. Yet last spring, when the federal jobless benefit was $600 — twice as large — nearly 7.7 million people returned to work.

Many of the unemployed say the extra benefit does help them take more time to seek better jobs than they had before the downturn. That impulse can create a problem for business owners and executives, who often want to hire immediatel­y. To them, the surge in customer demand emerging from the pandemic represents an opportunit­y to win new clients or increase market share.

On Friday, Treasury Secretary Janet Yellen downplayed the effect of the additional jobless aid on the willingnes­s of the unemployed to seek work. She said at a news conference that in states that provide higher unemployme­nt payments, the data shows the unemployed are actually more likely to find work than in states that provide lower benefits. : There are signs that more employers are doing just that. Friday’s jobs report showed that average hourly pay rose 0.7% in April to $30.17. For a single month, that’s a solid gain. Walmart, Amazon and Costco have all broadly raised their hourly wages in recent months. Still, not all companies are willing to do so. Not yet anyway.

Q A: Are other factors holding down job growth?

: Many small businesses closed in the pandemic, particular­ly in downtowns that emptied out as white-collar workers fled to work from home. Kristen Broady, an economist at the Brookings Institutio­n, noted that some of those companies have announced that they will continue to allow their employees to work from home, at least for part of the week. That trend will likely hurt downtown coffee shops, dry cleaners, gyms, and restaurant­s.

“When you think about those people,” Broady said, “their work circumstan­ces may never go back to preCOVID.”

And Caren Merrick, CEO of VA Ready, a Virginiaba­sed job training program, said that many employers appear too picky about whom they hire.

Her organizati­on trains laid-off workers, most from the restaurant and hotel industries, for jobs in health care, manufactur­ing, and informatio­n technology. Some of the trainees who earn certificat­ions are told by employers that they lack experience. Those companies could do more to find workers, she said, such as creating apprentice­ships or dropping requiremen­ts for college degrees.

“Some companies have barriers themselves that prevent them from hiring the people that they need,” Merrick said. “They need to make a greater effort.”

 ?? CHARLES KRUPA — THE ASSOCIATED PRESS FILE ?? A woman walks past the signs of an employment agency in Manchester, N.H.
CHARLES KRUPA — THE ASSOCIATED PRESS FILE A woman walks past the signs of an employment agency in Manchester, N.H.

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