U.S. Job Market Outlook: It’s Complicated
Labor Issues 061721
The pandemic may be easing, but the job market remains complicated.
The Labor Department reported Thursday, June 17, that initial jobless claims rose last week to 412,000. That unexpected increase is up from the previous week's total of 375,000 and is the highest number since May 15.
The numbers surprised economists surveyed by Dow Jones who had expected claims to continue their downward trend.
While really the increase came from two states, California and Pennsylvania, it's a far cry from a year ago when there were nearly 1.5 million new claims per week due to the pandemic.
"I'm hopeful over the next two or three months that we're going to get a lot more people back to work," said Secretary of Labor Marty Walsh during an interview with AgDay's Clinton Griffiths. "In the last two months, the largest areas of additions to our economy have been in the hospitality and restaurant sectors."
Secretary Walsh says there are still roughly 8 million Americans out of work even though the economy has added 2.1 million jobs over the past few months.
"As we get more people vaccinated, we're starting to see different cities open up and the economies of those cities open up," Walsh said.
Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate the Rural Mainstreet nonfarm employment remains 2%, below its pre-COVID-19 level. In three states, Kansas, Missouri and Nebraska, current employment exceeds pre-pandemic levels, according to the June 2021 Creighton University Rural Mainstreet Index.
Federal Reserve Chairman Jerome Powell is watching the economic recovery closely. During a press conference this week, he discussed the challenges employers are having trying to fill a record 9.3 million available jobs.
"The process of reopening the economy is unprecedented, as was the shutdown at the onset of the pandemic," Powell said. "As the reopening continues, shifts in demand can be large, and bottlenecks, hiring difficulties and other constraints could continue to limit how quickly supply can adjust, raising the possibility that inflation could turn out to be higher and more persistent than we expect."
Powell is keeping a close eye on inflation, even hinting interest rate increases may come sooner than anticipated. Two quarter-point increases aren't expected until 2023.
"Today the Federal Open Market Committee kept interest rates near zero and maintained our asset purchases," Powell said. "These measures along with our strong guidance on interest rates and on our balance sheet will ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete."
A recovery that's still underway as some 14.8 million people were receiving benefits as of May 29. That's down more than a half-million people since the last survey. The drop is attributed to states beginning to discontinue pandemic-related benefit enhancements and falling enrollments in those programs.
