After a hiring slowdown in April, American employers added twice as many jobs in May but still fell short of expectations.
(CN) — The U.S. economy added 559,000 jobs last month, an uptick that would be impressive in normal times but one that is seen as modest during a pandemic recovery.
The number of new jobs in May is more than twice the revised 278,000 added in April, but experts were predicting a gain of around 670,000.
Meanwhile, the unemployment rate fell from 6.1% to 5.8% last month, according to a Labor Department report released Friday.
Nick Bunker, economic research director at Indeed Hiring Lab, said at this pace, it will take a long time to get the labor market back to its pre-pandemic level.
“It’s hard to hate this report, but it’s also hard to love it,” he wrote. “It’s great to see a pickup in job growth, but it would have been better to see a larger acceleration.”
He said that while half a million jobs in one month would be “phenomenal news in a normal labor market,” it’s only a “decent pace of growth” now as the economy bounces back from the damage caused by the Covid-19 crisis.
“The labor market is not treading water, but it could take some time before we make it back to shore,” Bunker said.
The largest gain was seen in the leisure and hospitality sector, which added 292,000 jobs in May. The industry includes restaurants, bars and hotels hit hardest during pandemic lockdowns. Food and drinking establishments accounted for two-thirds of the increase, with 186,000 new jobs. But there are still 2.5 million fewer jobs in leisure and hospitality compared to February 2020, before the coronavirus took hold in the United States.
The local government education field added 53,000 positions last month and state government education gained nearly as many, with 50,000 new jobs, as schools look toward relative normalcy in the fall. Employment in private education rose by 41,000.
The health care and social assistance industry added 46,000 jobs in May, manufacturing and transportation and warehousing each added 23,000 and the information sector gained 29,000. Professional and business services added 35,000 jobs and wholesale trade gained 20,000.
The construction industry lost 20,000 jobs last month and retail employment fell by 6,000.
Elise Gould, senior economist at the nonprofit think tank Economic Policy Institute, noted the economy is still down 7.6 million jobs since early 2020 and said the real shortfall is more like 8.6 to 10.7 million when taking into account lost growth.
In remarks Friday from the Rehoboth Convention Center in Delaware, President Joe Biden lauded the progress the economy has made since vaccinations have been rolling at a more regular clip.
“With 2 million jobs created, it was the most ever created in the first four months of any presidency in modern history,” Biden said.
When data for the jobs report was gathered in mid-May, just 35% of working-age adults were vaccinated, he said. Now, 21 million more have received a shot.
“It is progress that’s pulling our economy out of the worst crisis it’s been in in 100 years,” Biden said. “Remember, when I took office in January the economy was in a tailspin, job growth had stalled, Covid was raging, unemployment claims were up to 830,000 per week.”
The president noted weekly jobless claims have been cut in half, now hovering below 430,000, and hunger has also taken a nosedive.
“Almost 24 million Americans were going hungry before I took office. Remember those long lines – miles long — for a box of food? That number has dropped by 25% – still too many, but it is clear progress,” he said.
A survey by the U.S. Census Bureau does show a reduction in food scarcity in the past few months. In May, about 9% of adults reported living in a household that doesn’t have enough food to eat. In December, that rate was 13.7%.
“None of this success is by accident, it isn’t luck,” Biden said. “It’s due in no small part to the American people getting Covid under control, wearing masks and getting vaccinated.”
With 52% of all American adults fully vaccinated and a bevy of incentives recently rolled out nationwide aimed at hitting the July 4 goal of 70% of U.S. adults having at least one shot, many have a cautiously optimistic outlook on the economy as summer unfurls and a return to school this fall is on the horizon for millions of American children.
Gould said an average monthly gain of 515,000 jobs through the end of 2022 would bring the labor market back to its pre-pandemic state.
“If this pace continues over the next year, we will likely get down to 4% unemployment by mid-2022 and will be fully recovered before the end of 2022,” she tweeted.
Heidi Shierholz, director of policy at the Economic Policy Institute and former chief economist at the Labor Department, said concern over a shortage of workers is overblown because a real shortage would force employers to pay employees more. Wage growth is relatively low, with the exception being the leisure and hospitality industry.
“But when you look further, you find this is nothing to be concerned about,” she wrote on Twitter. “Wage acceleration in leisure and hospitality doesn’t appear to have held back job growth at all. Job growth in that sector has been by far the strongest of any sector.”