U.S. companies continued to increase hiring in April, a solid job market welcomed by Joe Biden who sees the fruits of his economic policy.
Despite higher costs due to chronic labor shortages and record inflation, employers have added 428,000 new jobs to the world’s largest economy, especially in the service sectors, the manufacturing and transportation, which have been hardest hit by the pandemic. That’s more than the 395,000 jobs expected by an analyst consensus, but as much as in March after a slight downward revision.
95% of the jobs destroyed by the pandemic have been recreated
In two years, the U.S. economy has recreated nearly 95 percent of the 22 million jobs destroyed when the Covid-19 pandemic paralyzed economic activity and plunged the United States into a deep recession. spring 2020.
Although there was a recovery effect after the immediate and massive destruction and record unemployment of 14.7% in April 2020, the Democratic president has been credited with this recovery. “Our political measures have produced the strongest job creation of modern times,” Joe Biden said in a press release. “Unemployment is falling the fastest since the beginning of a presidential term,” he added.
Stable unemployment rate
The unemployment rate remained at 3.6%, close to that of February 2020, that is, just before the spread of the pandemic. At 3.5%, it was at its lowest level since 1969. In April, the number of unemployed remained “essentially unchanged at 5.9 million,” the ministry said in a statement. his press release.
The unemployment rate for blacks and African Americans, on the other hand, fell last month to 5.9% from 6.2% in March, although it remained much higher than for whites (3.2 %, unchanged) and Hispanics (4.1%). %, a decrease of 0.1 points).
Both the labor market participation rate of 62.2% and the employment-to-population ratio of 60.0% are “slightly varied”, according to the ministry. Each remains 1.2 percentage points below its February 2020 level.
Lack of labor
Over the past year, companies have faced a shortage of employees after many pandemic retirements and massive layoffs each 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 level in four months.” Therefore, the job offer is evolving “in the wrong direction,” he believes.
“While a lower unemployment rate would be fantastic, it may not be desirable,” he added in a note. “The paradox is that it would be healthier for the labor market if the unemployment rate stabilized at current levels and labor force participation rose to pre-pandemic levels.” It has created more than 4 million jobs this year, with an unemployment rate close to 3.3% at the end of the year.
More than 11 million jobs available
According to another Ministry of Labor survey released this week, there were more than 11 million jobs available in the country in March, a record. “And the leisure and hospitality industry still has 1.4 million fewer jobs than before the crisis,” said Diane Swonk, an economist at Grant Tronton. This delta represents more than 1.2 million jobs missing at the peak of February 2020, he notes.
For the public education sector, more than 300,000 jobs are still missing. “Burnout and salary arrears backed in education don’t help” hiring, he explained.
Wages are rising, not catching up with inflation
In an attempt to attract candidates, private sector companies have improved wage conditions, increased hiring bonuses, and now offer more generous social benefits. This boosted higher wages, which rose 0.3% in April compared to March. For a year, they advanced 5.5%, a jump, however, insufficient to offset record inflation.
“Fighting inflation is a priority for me,” repeated Joe Biden, blaming the pandemic and the invasion of Ukraine by Russia as responsible for worsening inflation. Inflation reached 8.5% in March in one year, according to the CPI index, the highest in forty years.