Startup Observer.com
  • Home
  • Industries
  • Innovation
  • outsourcing
  • Business
  • Finance
  • Headlines
  • Opinion
  • News
Home News Subsiding Delta wave seen boosting U.S. job growth; worker shortages still a constraint
News

Subsiding Delta wave seen boosting U.S. job growth; worker shortages still a constraint

by maria November 5, 2021
November 5, 2021
gawdo

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job growth likely accelerated in October as the headwind from the surge in COVID-19 infections over the summer subsided, offering more evidence that economic activity was regaining momentum early in the fourth quarter.

But the Labor Department’s closely watched employment report on Friday is expected to show worker shortages persisting, even after federal government-funded unemployment benefits have expired and schools have reopened for in-person learning.

Nonetheless, it will join rising consumer confidence and services sector activity in painting a more favorable picture of the economy, after the Delta variant of the coronavirus and economy-wide shortages of goods restrained growth in the third quarter to its slowest pace in more than a year.

“September was a bad dream, but since then vaccines have beaten back the Delta virus and the economy is marching forward and upward,” said Sung Won Sohn, a professor of finance and economics at Loyola Marymount University in Los Angeles. “We could have seen employment gains probably approaching 800,000, the primary constraint is labor shortages.”

Nonfarm payrolls likely increased by 450,000 jobs last month, according to a Reuters survey of economists. The economy created 194,000 jobs in September, the fewest in nine months.

October’s anticipated job gains would bring employment about 4.5 million jobs below its peak in February 2020. Estimates ranged from as low as 125,000 jobs to as high as 755,000.

Education employment is a wild card after sharp drops in payrolls at state and local governments as well as private institutions contributed to curbing job growth in September.

Pandemic-related staffing fluctuations in education have distorted normal seasonal patterns. Shortages of bus drivers and other support staff have been well documented. Education hiring in September was lower than usual, resulting in a decline after stripping seasonal fluctuations. Economists believe October was the same story.

“We think that seasonally adjusted education-related employment could fall by another 50,000 in October, as the increase in hiring that month anticipated by the seasonal factors does not fully materialize,” said Daniel Silver, an economist JPMorgan in New York.

Education payrolls dropped by 180,000 jobs in September.

The drop in COVID-19 cases has allowed Americans to travel, attend sporting events and frequent restaurants, boosting demand for workers.

IMPROVED OUTLOOK

Indeed, labor market indicators were fairly strong in October, with the ADP National Employment Report on Wednesday showing an acceleration in private payrolls. The Conference Board’s labor market differential – derived from data on consumers’ views on whether jobs are plentiful or hard to get – hit a 21-year high.

The number of Americans filing new claims for unemployment benefits fell below 300,000 in October and has remained under that level for four straight weeks.

The unemployment rate is forecast falling to 4.7% from 4.8% in September. While companies desperately want to hire, millions remain unemployed and outside the labor force.

This labor market disconnect has been blamed on caregiving needs during the pandemic, fears of contracting the coronavirus, early retirements, massive savings and career changes as well as an aging population and the recently ended expanded unemployment benefits. There were 10.4 million unfilled jobs as of the end of August. About five million people have left the labor force since the pandemic started.

Federal Reserve Chair Jerome Powell told reporters on Wednesday that “these impediments to labor supply should diminish with further progress on containing the virus, supporting gains in employment and economic activity.”

The Fed announced it would this month start scaling back the amount of money it is pumping into the economy through monthly bond purchases.

STRUCTURAL SHIFT

According to Beth Ann Bovino, chief economist at S&P Global Ratings, there was no evidence that generous pandemic jobless benefits discouraged the unemployed from seeking work. Bovino said the reason for people not taking up jobs appeared to stem more from the decision to drop out of the workforce entirely, signaling a structural shift rather than a temporary change.

She also noted that many people who moved out of cities during the pandemic have yet to return, which could create a mismatch between the open jobs and location.

“The labor market conditions since the pandemic began highlight a possible structural shift in the labor force, with 60% of the five million missing workers comprising people who have left the workforce entirely,” said Bovino.

There are concerns that worker shortages could be exacerbated by the White House’s vaccine mandate, which comes into effect on Jan. 4 and applies to federal government contractors and businesses with 100 or more employees.

There has also been a rise in strikes as workers take advantage of the tight labor market to demand more pay and better conditions. The walk out by about 10,000 Deere & Co workers will have no impact on October’s payrolls as it started in the middle of the period during which the government surveyed households and businesses for the employment report.

“Recent strike activity and vaccine mandates have been challenging factors on the supply front and suggest that labor market improvement will be gradual in coming months,” said Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina.

The scramble for workers is boosting wage growth, which together with record savings should help to underpin consumer spending over the holiday session, though salaries are lagging inflation and shortages of goods abound.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

www.gawdo.com
Share on FacebookShare on TwitterShare on Linkedin
0 FacebookTwitterPinterestEmail
previous post
Nintendo says chip shortage hitting hardware development
next post
Britain approves Merck’s COVID-19 pill in world first

You may also like

Finally, a single source of truth for Network...

May 22, 2022

Mickey Launches Automated Lumber Marketplace

May 22, 2022

UiPath and airSlate Partner to Propel Small Businesses...

May 22, 2022
Editorial & Advertiser disclosureEditorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
gawdo.com
https://www.gawdo.com
  • About us
  • Advertising & Terms of Use
  • Contact Us
  • Privacy Policy

@2021 - All Right Reserved.


Back To Top
Startup Observer.com
  • Home
  • Industries
  • Innovation
  • outsourcing
  • Business
  • Finance
  • Headlines
  • Opinion
  • News
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT