After analyzing the latest numbers from May reports, Federal Reserve officials have officially started to lower their employment growth expectations for the month as a whole. They have also begun to change their future perceptions according to recent employment reports, as more people are not entering the workforce as they initially thought, or hoped. Instead, they have lowered the numbers to try to reflect the actual amount of people entering the workforce every week and month, rather than the large expectation they initially had.
The Dallas fed data have also begun to lower their own expectations, in regards to weekly job growth. These official changes come amid the changing landscape in the United States. Now, much of America is beginning to open up (if they haven’t already) after the COVID-19 pandemic left many businesses shuttered or half working last year. As many businesses are completely opening up shop, there is a high need for workers.
However, the workers have not returned to the workforce that laid them off during the pandemic, for a variety of reasons. Some have theorized that people are not returning to work because they are making more money on a weekly basis while on unemployment, thanks to federal adjustments made during the pandemic. However, others believe that lack of childcare and growing COVID-19 concerns have also affected the number of workers rejoining the workforce.
Only about 266,000 people rejoined the workforce in April, which was a much lower than expected number. While there are fewer people filing jobless claims weekly, there doesn’t seem to be a huge advance in people joining the workforce. It was expected that more people would with each new week of the summer, but that hasn’t yet come to fruition.
Before these latest disappointing numbers, the Feds had hoped to see a few months quickly bring in more than one million new jobs that would allow people to rejoin the workforce. However, after April only had 266,000 new jobs, this number has been significantly tempered. All expectations were high, and they have also been adjusted as more analysis of April and May employment growth numbers come in.
There are about 8.2 million jobs that are still missing from the workforce from before the pandemic. However, because of the many potential reasons listed above, workers aren’t rejoining the workforce. It’s not known how long it will take for workers laid off during the pandemic to find new jobs, though Fed officials are looking into how to account for this new turn of events.
Currently, there is a lot of demand for workers and for businesses to be fully, 100%, open. However, businesses are not receiving the skilled or unskilled worker applications that many thought they would. The United States as a whole is expected to have an incredibly large economic growth this year. In fact, it’s supposed to be one of the strongest economic years since the 1980s. There’s no telling how these latest employment growth numbers may affect these anticipations.