Notwithstanding my admittedly (and deliberately) provocative suggestion that workers should question the utility of returning to what, for far too many Americans, is a nightmarish rat race in the US services sector, I should highlight a few bright spots from May’s NFP report.
While the headline missed estimates (again), the print was generally seen as validating the narrative that the US labor market is on track to gradually recover most of the jobs lost to the pandemic, even if it takes a while.
The gains logged in leisure and hospitality, while not spectacular, are welcome nonetheless. Two-thirds of the increase in leisure and hospitality was down to food services and drinking places, which added 186,000 positions. I update the figure (below) every NFP Friday, so in keeping with tradition, I’ll present it again.
It speaks for itself. The industry is still down 1.5 million jobs. 2021 has seen more than 800,000 clawed back.
Perhaps most notably, the number of Americans unemployed for 27 weeks or longer dropped by the most in a decade (figure below).
The total (3.8 million) is still tragically high. But the MoM decline (nearly a half-million) is good news. So good, in fact, that I can’t help but wonder if I’m missing something obvious that accounts for the decrease. If I am, it wouldn’t be the first time.
As a percentage of the total unemployed, those jobless for 27 weeks or more fell to 40.9% from a pandemic high of 43.4% in March. The all-time high is 45.5% in April of 2010.
It’s also worth noting that earnings for workers in leisure and hospitality are rising. The figure (below), shows a break above $18 per hour.
“Looking at the wage component, what we’re seeing, certainly in the leisure, hospitality, construction — the areas where the labor situation is tight — substantial wages increases,” Peter Boockvar said Friday.
Right. “Substantial.” Do me a favor, folks: Take out your smartphone, open the calculator app and do the math. How much does someone making $18.09 per hour and working a full work week make annually?
Did you do that math? Ok, now look at that number. Could your family live with any dignity on that? Could you (just you, with no family) live comfortably? No? Then keep that in mind when you hear people suggest (tacitly, accidentally or otherwise) that the chart (above) is somehow indicative of folks being “overpaid” or suggests a “wage spiral” is afoot in the services sector.
Finally, the African American unemployment rate dropped to 9.1% in May from 9.7% in April. The gap with white unemployment narrowed to four percentage points.
It’s 36 grand and it ain’t much. Here in KC the median rent on a i BR apartment is $1600/ month — 19K out of 36. Rest is for food, transport, clothes, med care — you know the luxuries.
Damned if I’m not starting to get radicalized seeing what’s going on here in the land of the free and the GOP.