By Isaac Cohen*
The last employment report released by the US Labor Department, last week, supports the prudent posture maintained thus far by the central bank. After the disappointing creation of 278,000 new jobs in April, 559,000 were created in May and the unemployment rate decreased from 6.1 to 5.8 percent. Both figures contrast with the vigorous creation of 785,000 new jobs in March, but they also indicate that the job market has not yet entered into a sustained pace which could justify to step on the brake.
True, some sectors such as leisure and hospitality led job creation in May, adding 292,000 new jobs, as increasingly vaccinated consumers returned to bars, hotels and restaurants. This may explain the complaint among employers, particularly among small entrepreneurs in that sector, about a shortage of workers. However, not all sectors performed as vigorously, such as construction which lost 20,000 jobs in May.
Other indicators signal that the US economy still needs support to regain pre pandemic levels. Despite the recent job increases, there are still 7.6 million unemployed, while wage have yet to increase vigorously. In May, for instance, average hourly wages increased only 15 cents to $30.33, less than the increase of 21 cents in April. As the president of the Federal Reserve Bank of Cleveland Loretta J. Mestar said “I would like to see a little bit more in the labor market to really see that we are on track.” (The New York Times 06/05/2021).
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.