Many signs have begun to signal that the labor shortage that has been gripping the nation since the United States economy began to speedily reopen earlier this year is coming to an end. According to the Labor Department’s latest employment report, 151,000 people entered the labor force last month and were hired by various businesses. This is the most workers hired in the United States (in one month) in 10 months.
Many people were hired and entered the workforce for a variety of reasons. Other data from Indeed and other job search engine sites reveal that many companies offered incentives and raised wages in order to successfully hire new workers. Those higher wages and incentives have seemed to pay off, as the Labor Department’s data reveals that job hirings truly did increase.
However, not everything is back to normal with the economy and job hirings. While hirings did pick up for the month of June, the amount of Americans looking for a job, or those who have one, has not moved from the number it has stayed at since June 2020. So, while there has been this latest uptick in hiring, there still seems to be an average number of people unemployed.
The economy in the United States has steadily been on its way back to “normal” for the past few months now. About 150 million Americans are fully vaccinated now, which has helped pave the way for COVID-19 pandemic-related regulations and laws to go away. People are going out, traveling, and looking to spend money, some for the first time since the pandemic started.
However, the economy has had some struggles. Everything in the United States very quickly began to reopen once more Americans became vaccinated. This caused a huge surge in consumer demand for a variety of different goods and services — and businesses in many industries had a hard time meeting this demand.
Labor shortages and raw material shortages have continued to plague the United States economy, and it doesn’t appear as if anything will fix these problems anytime soon. While the latest Labor Department report about the increase in hirings is positive and slightly hints that we may be getting out of this labor shortage problem, unemployment levels are still not where most analysts want them to be. Even if these latest numbers do signal a positive step in the right direction, it will probably still take months for the labor shortage to truly stop negatively affected the U.S. economy.
However, incentives and higher wages may help bring this labor shortage to an end. Average hourly earnings rose by about 0.3% in June; the month before, in May, it rose by 0.4%. Therefore, wages seem to be steadily increasing with each new month. Because of these latest stats, the annual wage growth increased from 1.9% to 3.6% in May.
Incentives may also continue. According to Indeed, about 4.1% of job postings promoted incentives such as signing bonuses, one-time cash payments, and more.
However, unemployment rates are still issues, as the rate rose to 5.9% (it was at 5.8% in May).