With the US economy recovering from the economic fallout of the COVID-19 pandemic, the monthly jobs reports from the US Bureau of Labor Statistics are providing an invaluable insight into the exact progression of employment recovery. The May 2021 jobs report represented an improvement over the April 2021 report, but demonstrates there is still a way to go before full economic recovery.
April jobs report: A bust
The April 2021 jobs report in fell well short of expectations. The economy added only 266,000 jobs in April, while economists forecast 1.0 million jobs. This led to widespread debate regarding the impact of extended unemployment insurance benefits, child care concerns, lingering hesitancy regarding coronavirus safety and the supply chain issues that have been roiling the US economy in recent months.
May jobs report: A little better
In the latest jobs report, the US economy added 559,000 jobs, falling slightly shy of the economist forecast of 671,000 jobs. The unemployment rate fell slightly from 6.1% in April 2021 to 5.8% in May 2021. The labor force participation rate remained relatively unchanged at 61.6%. While not an ideal jobs report, this represents a real improvement over the somewhat dismal numbers from April.
Construction employment declines
Digging deeper into the weeds, one trend that stood out from the latest jobs report was a slight decline of 20,000 jobs in the Construction sector. This decline was primarily due to a decrease of 17,000 jobs among nonresidential specialty trade contractors. As many workers continue to work remotely, fully or partially, demand for Commercial Building Construction has lagged behind overall economic growth as a whole. However, IBISWorld forecasts that nonresidential construction will bounce back in 2022, as more workers return to full-time in-person work and the economy returns more solidly to prepandemic conditions.
Hospitality boom
However, employment in the leisure and hospitality sector increased, adding 292,000 positions. Pandemic-related restrictions have eased across the United States, as vaccination rates have risen and cases have declined to the lowest rates since the pandemic began. This reflects IBISWorld forecasts for the Hotels & Motels industry in 2021, which is expected to experience revenue increase 55.0% this year alone, as demand has already sharply increased as pandemic restrictions ease. Education also experienced a boom in hiring in May, as in-person learning at Public Schools and Private Schools began resuming across the country.
More to come
Overall, the May 2021 jobs report demonstrates that some sectors of the economy, such as the hospitality sector, are recovering more rapidly than others. Nevertheless, this recent jobs report still displays that a full recovery in job markets will likely take some time.
