The Labor Department will release its May jobs report Friday morning, offering a fresh look at a labor market in which millions remain out of work but many employers say they are having trouble finding applicants.
Analysts surveyed by Bloomberg expect the May report to show that employers added 650,000 jobs last month — more than twice the disappointing tally in April — and that the unemployment rate fell to 5.9 percent from 6.1 percent.
The labor market has started to regain its footing, but the path has not been smooth. Job growth bounced up and down in recent months, and may continue its uneven progress throughout the summer, analysts said.
“I think the end is in sight,” said Carl R. Tannenbaum, chief economist at Northern Trust, “but it’s going to be a long and winding road back to full employment.”
A second month of weak growth could signal that the recovery is faltering, or that the economy’s swift reopening will take time to sort out. A strong report could offer evidence that talk of a labor shortage was overblown — or that employers have addressed it by increasing wages. [Here are some indicators that economists are watching to gauge the recovery.]
Job postings are far above where they were in February 2020, before the wave of coronavirus cases hit. At the beginning of the pandemic, job postings plummeted much faster than job searches, said Julia Pollak, a labor economist at the online jobs site ZipRecruiter. Now there is a similar dynamic: Postings have picked up much more quickly than search activity.
“It’s just a matter of time,” said Ms. Pollak, who pointed out that many prime-age workers were only recently able to get their first Covid-19 vaccination.
She also said there was a mismatch between the type of jobs being offered and those being searched for. More than half of job seekers want remote work, while only 10 percent of employers are offering that option.
Economists will also be looking to see if workers who left the work force over the past year are beginning to rejoin.
Nearly half of small-business owners surveyed by the National Federation of Independent Business in May said they were struggling to fill slots. Many employers have blamed enhanced pandemic-related unemployment benefits for the shortage of workers, which has prompted 25 Republican-led states to withdraw from some or all of the federal jobless assistance programs in the coming weeks, months ahead of their expiration.
Most economists have pushed back against this argument and say the reality is more complicated. A lack of child care, continuing health concerns, low wages and competing priorities all probably play a larger role, they say.
Other job hunters say they have had trouble getting hired at a level comparable to their previous positions.
Jenny Crowley, 40, worked in marketing for a professional education and entertainment company in Chicago before her industry “screeched to a halt” during the pandemic. She has been urgently looking for a job since July — she estimated she had applied for more than 400 so far — but has had only a handful of interviews and has received no job offers, she said.
Many of her friends are in similar situations — an unfortunate reality that nevertheless provides a kind of unusual solace. “It’s not unique to me at all, which is both comforting and frustrating at the same time,” said Ms. Crowley, who is single.
“I’m optimistic because I have to be,” she said. “I’m confident in my abilities and the value that I bring. I think there’s just a lot of competition in the job market right now, and I think a lot of it is right time, right place.”
Employers across the country in recent months have complained that they cannot find enough workers, despite an unemployment rate that remains higher than before the pandemic.
Not all workers may come rushing back as the pandemic recedes. Some older workers have probably retired. Other families may have discovered they can get by on one income or on fewer hours. That could allow labor shortages to persist longer than economists expect, Ben Casselman reports for The New York Times.
The simplest way to track the supply of available workers is the labor force participation rate, which reflects the share of adults either working or actively looking for work. Right now it shows plenty of workers available, although the Labor Department doesn’t provide breakdowns for specific industries.
Another approach is to look at the ratio of unemployed workers to job openings, which provides a rough measure of how easy it is for businesses to hire (or, conversely, how hard it is for workers to find jobs). Data from the Labor Department’s Job Openings and Labor Turnover Survey comes out a month after the main employment report, but the career site Indeed releases weekly data on job openings that closely tracks the official figures.
Both those approaches have a flaw, however: People who want jobs but aren’t looking for work don’t count as unemployed. Constance L. Hunter, chief economist for the accounting firm KPMG, suggests a way around that problem: the number of involuntary part-time workers. If companies are struggling to find enough workers, they should be offering more hours to anyone who wants them, which should reduce the number of people working part time because they can’t find full-time work.
“The data is not necessarily going to be as informative as it would be in a normal recovery,” Ms. Hunter said. “I would not normally tell you coming out of a recession that I’m going to be closely watching involuntary part-time workers as a key indicator, but here we are.”
Workers in retail, hospitality and other service industries bore the brunt of last year’s mass layoffs. But unlike low-wage workers in past recessions, whose earnings power eroded, many of those who held on to their jobs saw their wages rise even during the worst months of the pandemic.
Now, as the economy bounces back and employers need to find staff, workers have the kind of leverage that is more typical of a prolonged boom than the aftermath of a devastating recession. Average earnings for nonmanagers in leisure and hospitality hit $15 an hour in February for the first time on record; in April, they rose to $15.70, a rise of more than 4.5 percent in just two months.
President Biden’s administration is embracing those gains and hoping they shift power away from employers and back toward workers. And Federal Reserve officials have indicated that they would like to see employment and pay rising, because those would be signs that they were making progress toward their goals of full employment and stable prices.
The stage is set for an economic experiment, one that tests whether the economy can lift laborers steadily without igniting much-faster price increases that eat away at the gains.
“Instead of workers competing with each other for jobs that are scarce, we want employers to compete with each other to attract workers,” Mr. Biden said in Cleveland last week. “When American workers have more money to spend, American businesses benefit. We all benefit.”
The billionaire William Ackman has finally found his match.
Mr. Ackman’s special purpose acquisition company is nearing a deal to take a 10 percent stake in the Universal Music Group that would value the company behind Taylor Swift, Lady Gaga and Kendrick Lamar at about $40 billion, two people briefed on the situation said.
The deal could be announced in the next few weeks, though it is not final and could still fall apart, said the people, who requested anonymity because the talks are confidential.
Special purpose acquisition companies, more commonly known as SPACs, use capital from the public market to invest in a private company, taking it public in the process. Mr. Ackman’s SPAC, Pershing Square Tontine Holdings, has been on the prowl for a target since raising $4 billion through an initial public stock offering in July. While it was one of hundreds of SPACs started last year, its large size made guessing which company it would finally make a deal with a popular game across Wall Street. A broader pullback in SPACs amid heightened regulatory scrutiny added to the interest.
“We’ve been working on a transaction since early November,” Mr. Ackman said at a Wall Street Journal conference last month. “We’re either going to get a transaction done in the next relative short term — weeks — or we’ll be onto the next one.” He said the deal was with an iconic private company and it would be complex.
The Universal Music Group is backed by the French media giant Vivendi, which has said it plans to take the music business public by the end of this year. Other investors include the Chinese internet company Tencent, which announced in January that it had increased its stake in Universal to 20 percent in a deal that valued the company at 30 billion euros ($36.4 billion).
The size of a SPAC is only loosely related to that of its target. Additional funding arranged alongside a merger allows SPACs to take on bigger targets.
Singapore’s Grab, which offers ride hailing, grocery delivery and other services, announced a SPAC deal in April that valued it at $39.6 billion, making it the largest SPAC transaction to date.
The Wall Street Journal reported the deal talks earlier.