U.S. job growth increased more than expected in April, underscoring the economy's strong fundamentals despite a contraction in gross domestic product in the first quarter, Reuters reported. Nonfarm payrolls rose by 428,000 jobs last month, the Labor Department said on Friday. Data for March was revised down to 428,000 jobs added from 431,000. Economists polled by Reuters had forecast payrolls rising by 391,000 jobs. The unemployment rate was unchanged at 3.6%. The jobs-workers gap widened to an all-time high of 3.4% of the labor force from 3.1% in February. Average hourly earnings increased 0.3% after advancing 0.5% in March.
Millions of older Americans stopped working during the pandemic, far more than usual, stoking fears that the workforce had been permanently altered, but the country is close to closing the gap in early retirements, according to new data, the Washington Post reported. An estimated 1.5 million retirees have reentered the U.S. labor market over the past year, according to an analysis of Labor Department data by Nick Bunker, an economist at Indeed. That means the economy has made up most of the extra losses of retirees since February 2020, a Washington Post analysis shows. Many retirees are being pulled back to jobs by a combination of diminishing COVID-19 concerns and more flexible work arrangements at a time when employers are desperate for workers. In some cases, workers say rising costs — and the inability to keep up while on a fixed income — are factoring heavily into their decisions as well. Roughly 2.4 million additional Americans retired in the first 18 months of the pandemic than expected, making up the majority of the 4.2 million people who left the labor force between March 2020 and July 2021, according to Miguel Faria-e-Castro, a senior economist at the Federal Reserve Bank of St. Louis. The percentage of retirees returning to work has picked up momentum in recent months, hitting a pandemic high of 3.2 percent in March, according to Indeed. In interviews with nearly a dozen workers who recently “un-retired," many said they felt comfortable returning to work now that they’ve gotten the coronavirus vaccine and booster shots. Almost all said they’d taken on jobs that were more accommodating of their needs, whether that meant being able to work remotely, travel less or set their own hours.
U.S. private employers hired the fewest workers in two years in April amid chronic labor shortages and rising costs, which are hitting small businesses the hardest, raising the possibility that overall job growth slowed considerably last month, Reuters reported. That was reinforced by a separate survey from the Institute for Supply Management (ISM) on Wednesday showing a measure of services sector employment contracted in April for the second time this year. Services businesses in the ISM survey described demand for workers as remaining "hypercompetitive," noting that "there is just not enough qualified personnel available." Government data on Tuesday showed there were a record 11.5 million job openings on the last day of March, which pushed up the jobs-workers gap to a record 3.4% of the labor force from 3.1% in February. "The softer trend is consistent with a slowing in job growth that we expect to start in April," said Veronica Clark, an economist at Citigroup in New York. "Softer monthly job gains would likely be due to labor shortages." Private payrolls rose by 247,000 jobs last month, the smallest gain since April 2020, after increasing 479,000 in March. The slowdown in hiring was across the board, with leisure and hospitality industry payrolls rising by 77,000 jobs, the fewest since late 2020. Manufacturing employment increased by 25,000 jobs, while construction added 16,000 positions.
U.S. job openings increased to a record high in March as worker shortages persisted, suggesting that employers could continue to raise wages and help keep inflation uncomfortably high, Reuters reported. Job openings, a measure of labor demand, rose by 205,000 to 11.5 million on the last day of March, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday. The second straight monthly increase lifted job openings to the highest level since the series started in 2000. Economists polled by Reuters had forecast 11 million vacancies. The JOLTS data is being closely watched by Federal Reserve officials, who have adopted an aggressive monetary policy stance as they battle sky-rocketing inflation, with annual consumer prices surging at rates last seen 40 years ago.
States that prematurely ended enhanced unemployment benefits programs implemented during the pandemic did not see greater job growth compared to states that kept them, The Hill reported. A new report from the Federal Reserve Bank of San Francisco contradicted the theory that expanded benefits disincentivize people from returning to work, which many Republican state leaders argued when they cut the expanded benefits granted by the federal government. “We find that the UI withdrawals had limited direct impacts on hiring rates, which suggests the enhanced UI benefits were not an important source of labor shortages in 2021,” the report states. The benefits from the Coronavirus, Aid, Relief and Security Act officially ended in September 2021. But 26 states cut them early as the job market improved in the first half of 2021, with job openings reaching record levels. The act gave unemployed people an additional $600 weekly on top of benefits, which was later reduced to $300. “Economists and policymakers typically weigh these positive aspects of UI benefits against their potentially adverse effects on job search: by easing the financial pressure to find work, generous benefits may overly delay people’s transitions to prior or new jobs,” the report states.
The United States spent more aggressively to protect its economy from the pandemic than many global peers, a strategy that has helped to foment more rapid inflation — but also a faster economic rebound and brisk job gains, the New York Times reported. Now, though, America is grappling with what many economists see as an unsustainable worker shortage that threatens to keep inflation high and may necessitate a firm response by the Federal Reserve. Yet U.S. employment has not recovered as fully as in Europe and some other advanced economies. That reality is prodding some economists to ask: Was America’s spending spree worth it? As the Fed raises interest rates and economists increasingly warn that it may take at least a mild recession to bring inflation to heel, risks are mounting that America’s ambitious spending will end up with a checkered legacy. Rapid growth and a strong labor market rebound have been big wins, and economists across the ideological spectrum agree that some amount of spending was necessary to avoid a repeat of the painfully slow recovery that followed the previous recession. But the benefits of that faster recovery could be diminished as rising prices eat away at paychecks — and even more so if high inflation prods central bank policymakers set policy in a way that pushes up unemployment down the road.
Better, the online mortgage lender that drew criticism for firing about 9% of its workforce via video conference call last year and made additional reductions last month, is planning to cut its staff further through a voluntary separation plan, Bloomberg News reported. The company is offering some of its corporate and product development and engineering employees as much as 60 days of severance pay and health insurance if they agree to depart, according to a person with knowledge of the plans. Employees under 40 years old will have seven days from receipt of the separation agreement to accept the offer, with their last day on April 15 and final payment on the same date, the person said. Those 40 and older will have 21 days to accept. Chief Executive Officer Vishal Garg sparked outrage for last year’s mass firing, then apologized and took a hiatus after clips of the incident went viral. A month ago, New York-based Better began firing roughly 3,000 employees in the U.S. and India — about 35% of its workforce — as rising interest rates weigh on the volume of new loans.
