US companies continued to multiply the in April hiringa solid labor market praised by Joe Biden who sees the fruits of his economic policy.
Despite higher costs due to a chronic labor shortage and record inflation, employers have added 428,000 new jobs to the world’s largest economy, particularly in the service, manufacturing and transportation sectors, the sectors hardest hit by the pandemic. . It is more than the 395,000 jobs which were expected by a consensus of analysts, but the same as in March after a slight downward revision.
95% of the jobs destroyed by the pandemic have been recreated
In two years, the US economy has recreated nearly 95% of the 22 million jobs destroyed during the pandemic COVID-19 had paralyzed economic activity and collapsed the United Statesinto a deep recession in the spring of 2020.
While there was a catch-up effect after immediate and massive destruction and a record unemployment rate of 14.7% in April 2020, the Democratic president has taken credit for this recovery. “Our policies have produced the strongest job creation of modern times,” said Joe Biden in a press release. “The drop in unemployment (is) the fastest on record since the start of a presidential term,” he added.
Unemployment rate stable
The unemployment rate remained at 3.6%, close to that of February 2020, i.e. just before the spread of the pandemic. At 3.5%, it was then its lowest level since 1969. In April, the number of unemployed remained “virtually unchanged at 5.9 million,” the ministry said in a press release.
The unemployment rate for black or African American people, on the other hand, fell to 5.9% last month from 6.2% in March, while remaining much higher than that of whites (3.2%, unchanged) and Hispanics (4, 1). %, down 0.1 point).
In contrast, both the employment rate of 62.2% and the employment rate of 60.0% are “little varied,” the ministry estimates. They each remain 1.2 percentage points below their February 2020 level.
Labor shortages
For the past year, companies have struggled with staff shortages after many retirements during the pandemic and massive layoffs every month to find better working conditions. Gregory Daco, chief economist at EY Parthenon, notes that the participation rate fell 0.2 percentage points last month, “to its lowest point in 4 months.” The labor supply is therefore evolving “in the wrong direction”, he believes.
“While lower unemployment would be great, it may not be desirable,” he added in a note. “The paradox is that it would be healthier for the labor market if unemployment stabilized at current levels and the employment rate increased towards pre-pandemic levels.” It expects to create more than 4 million jobs this year, with an unemployment rate of nearly 3.3% by the end of the year.
Over 11 million jobs available
According to another study by the Department of Labor published this week, there were more than 11 million jobs available in the country in March, a record. “And the leisure and hospitality sector still has 1.4 million fewer jobs than before the crisis,” said Diane Swonk, an economist at Grant Tronton. This delta represents more than the 1.2 million jobs that were missing at the February 2020 peak, she emphasizes.
More than 300,000 jobs are still missing for public education. “Burnout and lagging pay increases in education aren’t helping” recruitment, she explained.
Wages are rising without catching up with inflation
In an effort to attract candidates, private sector companies have improved their salary conditions, increased hiring bonuses and are now offering more generous social benefits. This resulted in higher wages, which rose by 0.3% in April compared to March. In one year they rose by 5.5%, a jump that was not enough to offset the record inflation.
“Fighting inflation is a top priority for me,” Joe Biden reiterated, blaming the pandemic and Russia’s invasion of Ukraine for deteriorating inflation. Inflation reached 8.5% a year in March, according to the CPI index, the highest in 40 years.