Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Economists Brace for Another Volatile Monthly U.S. Jobs Report

EconomyJun 03, 2021 06:09AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters Economists Brace for Another Volatile Monthly U.S. Jobs Report

(Bloomberg) -- Economists, blindsided by a major miss in April’s U.S. employment report, are now ready for any number of surprises.

Estimates for May payrolls growth are wide-ranging -- from 335,000 to 1 million, according to a Bloomberg survey. After the previous month’s disappointment, in which employment fell short of all projections, some forecasters have tweaked their models ahead of Friday’s Labor Department report.

“I have a range of models that spit out zero and others that spit out a million,” said Aneta Markowska, chief U.S. financial economist at Jefferies (NYSE:JEF) LLC. “That’s the world we live in right now. Honestly, anything is possible.”

It’s no wonder experts are stumped considering how uneven the recovery has been. On one hand, warmer weather across the U.S., large swaths of fully-vaccinated adults eager to resume travel and socializing, as well as fewer pandemic restrictions suggest a boon for hiring in the hospitality industry. What’s more, schools are reopening and more people are headed back to the office.

At the same time, employers continue to say they can’t find enough workers to fill positions as health concerns, child-care demands, and enhanced unemployment benefits may be deterring applicants. There are also ongoing supply-chain bottlenecks and a global chip shortage that’s constraining manufacturers and automakers.

These frictions are making forecasting increasingly tricky. In April, payrolls rose 266,000, though economists had expected 1 million. That marked the biggest downside miss on records dating back to 1996. In May, the median estimate in the Bloomberg survey is for a gain of 655,000.

Before the pandemic, estimates typically varied by about 20,000 jobs. Now, the so-called standard deviation -- or a measure of how spread out the forecasts are -- is about 146,000 payrolls.

“You’re going to get these bottlenecks when you’re reopening the economy,” said Brett Ryan, senior U.S. economist at Deutsche Bank (DE:DBKGn) Securities Inc. “I wouldn’t be surprised for a 500,000 number, I wouldn’t be surprised for a million number.”

What Bloomberg Economics Says...

“The April miss was a one-off, in our view, and ongoing reopening across the country will pull a significantly higher number of Americans into employment in May.”

-- Yelena Shulyatyeva, Andrew Husby, Eliza Winger, economists

It’s also not clear how long some habits that consumers picked up during lockdown will last, which could be reflected in the employment data. For example, transportation and warehouse jobs declined in April, suggesting demand for online shopping is subsiding after surging earlier in the pandemic. Grocery store employment also dropped, which could reflect fewer people are cooking at home.

And last week, manufacturer Honeywell International Inc (NASDAQ:HON). said it would lay off nearly 500 workers as it stops production of N95 face masks. The job cuts come after the U.S. Centers for Disease Control dropped mask requirements for fully vaccinated people.

Despite short-term volatility, economists agree that employment is poised to strengthen in the months ahead. The unemployment rate will fall below 5% by the end of the year, according to a Bloomberg survey of economists. Before the pandemic, the jobless rate was less than 4%.

Even so, gains this year might not move the needle for the Federal Reserve, where officials are looking for a broad-based labor market recovery before raising rates and scaling back $120 billion in monthly asset purchases.

“Jobs are down by over 8 million relative to their pre-pandemic level, and the shortfall is over 10 million jobs if we take into account the secular job growth that would have occurred over the past year,” Fed Governor Lael Brainard said Tuesday. “Today employment remains far from our goal.”

©2021 Bloomberg L.P.

 

Economists Brace for Another Volatile Monthly U.S. Jobs Report
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email