Employers added 559,000 jobs in May and the unemployment rate dropped to 5.8%. However, the labor force participation rate is at its lowest level since 1976, and over 5 million Americans remain out of the labor force compared to before the pandemic.
There are still 7.6 million fewer jobs in the U.S. than before the pandemic. According to the World Economic Forum, 34% of America’s small businesses are still closed due to COVID-19.
There are 9.3 million Americans unemployed and 8.1 million job openings, which suggests there is a serious mismatch between the types and locations of jobs employers need to fill and the types of jobs Americans are looking to move into.
Compared to pre-COVID, there are also 2.1 million Americans who are not in the labor force but say they want a job, which suggests child care and home-schooling issues remain a problem.
The median weeks of unemployment declined to 19.3 weeks after increasing from December to April, which suggests the reduction in generous UI benefits in 25 states is encouraging some long-term unemployed to take a job.
The relaxing of COVID restrictions created big jumps in school employment and the leisure and hospitality industry. Employers across a broad spectrum of industries added jobs, including:
- Hotels, bars, and restaurants (+220,600),
- State and local education (+103,000),
- Arts, entertainment, and recreation (+71,700),
- Professional and business services (+35,000),
- Information (+29,000), and
- Social assistance services (+23,300).
Notably, nonresidential construction and food and beverage stores lost jobs, which may be related to the impact of COVID on business and office construction and seasonal adjustment issues.
Looking ahead: At the current pace of job growth, it will take until August 2022 to restore all of the jobs lost to COVID. Economist are forecasting continued job gains, but tax increases are likely to mute those gains next year.
