In contrast to the anemic April jobs report and the blockbuster report in March, the May jobs report has strong but measured signs for the economy in general. Hospitality continues to be a bright spot in the economic recovery.
May jobs report takeaways:
- Unemployment: the unemployment rate inched down to 5.8%, which represents a year-over-year improvement but still well above the February 2020 rate which was 3.5%
- Total nonfarm payroll employment increased by 559,000 in May, following increases of 278,000 in April and 785,000 in March.
- Hospitality continues to rebound: with an increase of nearly 300,000 workers.
Leisure and hospitality:
- In leisure and hospitality, much of the employment increase was in food services and drinking places, which were up by 186,000. Employment also rose in amusements, gambling, and recreation (+58,000) and in accommodation (+35,000). Employment in leisure and hospitality is down by 2.5 million, or 15.0 percent, from its level in February 2020.
- The retail trade held steady overall. Clothing and clothing accessories stores added 11,000 jobs. Employment in food and beverage stores decreased by 26,000, following a decline of 47,000 in April. Employment in retail trade is 411,000 below its February 2020 level.
Other important sectors:
- Education also saw gains in May, reflecting the return of in-person learning. Employment rose by 53,000 in local government education, by 50,000 in state government education, and by 41,000 in private education. However, employment is down from February 2020 levels in local government education (-556,000), state government education (-244,000), and private education (-293,000).
- Health care and social assistance added 46,000 jobs in May. Employment in health care continued to trend up (+23,000), reflecting a gain in ambulatory health care services (+22,000). Social assistance added 23,000 jobs over the month, largely in child day care services (+18,000). Compared with February 2020, employment is down by 508,000 in health care and by 257,000 in social assistance.
- Professional and business services added a small number of jobs (35,000) in May. Part of this increase can be attributed to temporary employment (4,000 jobs), which followed a large decrease in April of -116,000 jobs. Employment continued to trend up in accounting and bookkeeping services (+14,000).
- In May, employment changed little in other major industries, including mining, financial activities, and other services.
Factors to watch in the economic recovery:
- Consumer prices rose in May, reflecting Americans strong desire to travel. Consumer prices had the biggest annual increase in almost thirteen years, and consumers are seeing those increasing in everything from plane fares to used motor vehicles.
- Some of the nation’s largest states, such as California and New York, are heralding high vaccination rates by fully reopening activities and tourist centers with few or no restrictions.
- Faced with a serious labor shortage, many employers in the retail, hotel, leisure, restaurant and warehouse sectors are contemplating raising starting wages or already have. Amazon has raised it’s starting wage to $17 per hour and offers signing bonuses while Bank of America is looking to make minimum pay at the company $25 an hour by 2025.
- A recent Axios/Ipsos poll found that Americans were deeply divided on whether to require proof of vaccination for workers going back to work in person. 52% said they support requiring proof of vaccination to return to work, while 48% were opposed.