US Economy Adds Record 1.8 Mn New Jobs in March As Hiring Slows

Summary

  • Food and accommodation sector creates the highest number of jobs at 185,000, followed by the education department at 155,000, and entertainment and recreation at 81,000.
  • However, the number of jobs in the healthcare and social assistance sectors decreased by 218,000, the Labor data showed.
  • The fear of contracting the virus, jobless benefits, and remote schooling may have kept people away from work, experts say.

The US Labor Department said on Tuesday that a record 8.1 million vacant positions were up for grabs in March, although the pace of hiring has slowed down over the subsequent period.

The food and the accommodation sector created the highest number of jobs at 185,000, followed by the education department at 155,000, and entertainment and recreation at 81,000.

Other sectors like construction, hospitality, manufacturing, transportation, and e-commerce also made significant contributions, driven by strong demand for various consumer goods and services.

According to an industry estimate, the number of new job openings was up 24% in March compared with the figures in the same period last year. However, the number of jobs in the healthcare and social assistance sectors decreased by 218,000, the Labor data showed.

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The Northeast and the Midwest regions saw the highest number of job openings. The department had earlier said that the number of hiring dropped to 266,000 in April from 770,000 in March, which is a primary reason for the high number of open positions now.

Pic Credit: Pixabay.

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Several factors may have influenced people’s decision to stay away from work. The most significant one, perhaps, is the fear of contracting the virus. Another reason could be the government’s jobless benefit that may have lessened the urgency to take up jobs on financial grounds, say experts. Because of these reasons, the number of vacancies increased over the past two months, they say.

Meanwhile, companies feel the crunch of labor shortage, especially those in the manufacturing and warehouse business. Several companies have expressed their frustrations over the lack of workers. Some have even raised the salaries to ensure retention.


Also Read: US Employment Numbers Fall Short of Expectations in April 2021

Recovery And Labor Shortage

The US economy has made significant strides in recent weeks following massive fiscal spending and vaccinations, which gave a major boost to the markets, raising hopes that a rebound is on track.

As people are getting their unemployment benefits, which are almost equal to a suburban wage, while sitting at home, they aren’t willing to join work for just a few more dollars, experts say.  The jobless benefits and remote schooling are the main reasons for the low labor supply, they say. 

Eligible American households currently receive a weekly payment of US$300 as part of President Joe Biden’s US$1.9 trillion covid relief package. However, this generous help, which will be in place until early September, is also proving to be a major dissuader in bringing people back to work.

Another reason for people not joining work is childcare as schools are run these days remotely. It will also tentatively end when schools reopen after fall. The third and the most crucial reason is Covid-19 contraction. Experts believe the labor supply issue is likely to improve by the end of 2021.


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