The U.S. added a modest 559,000 new jobs in May even though most companies are eager to hire, showing labor shortages are holding back economic recovery. The 5.8% unemployment rate understates the true level of unemployment, economists say.
The numbers: The U.S. added a modest 559,000 new jobs in May even though most companies are eager to hire, signaling that labor and supply shortages are holding back an economic recovery.
The biggest obstacles to a full recovery are major shortages of key supplies and labor owing to ongoing disruptions resulting from the pandemic. An emerging labor shortage is an even bigger surprise. The unemployment rate still quite high and the U.S. is missing almost 8 million jobs that existed before the pandemic.Economists say early retirements, a lack of child-care options, lingering fear of the coronavirus and generous unemployment benefits explain why more people haven’t returned to work. These problems probably won’t clear up at least until the fall.
“Another disappointing rise in payrolls in May,” said chief economist Rubeela Farooqi of High Frequency Economics. “Ongoing pandemic-related issues includingKey details: The bulk of the new jobs in May were created by the businesses that suffered the biggest declines in employment during the pandemic.
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