Tag Archives: pre-pandemic levels

U.S. airline passenger volume rises but down 21% from pre-pandemic levels

By David Shepardson

WASHINGTON (Reuters) -U.S. airlines carried 66.4 million passengers in June, three times the June 2020 volume but still down 21% from pre-pandemic levels, the U.S. Transportation Department said Tuesday.

The largest 21 U.S. airlines that handle more than 90% of all U.S. traffic carried 9.2 million more passengers in June than the 57.2 million passengers transported in May. The department said June domestic passengers were down 17% while international passengers were down 45%.

The Transportation Security Administration said Tuesday that for the seven days ending Monday airline passengers screened were down 22% over the same period in 2019.

Airlines for America, an industry trade group, says U.S. airlines are operating 17% fewer domestic flights over 2019 levels and 35% fewer international flights. As a result, the group says current average domestic load factors — 89% — are identical to pre-pandemic levels.

The Biden administration has not lifted travel restrictions that bar much of the world from entering the United States, including most non-U.S citizens who have been in China, India, Iran, South Africa, Brazil, the United Kingdom and much of Europe within the last 14 days.

Last week, Southwest Airlines warned that the spread of the Delta variant of COVID-19 had hit bookings and increased cancellations, hurting its chances at profitability this quarter.

(Reporting by David Shepardson; Editing by Chizu Nomiyama and Mark Porter)

U.S. jobless claims dropping faster in states ending federal benefit

By Howard Schneider

WASHINGTON (Reuters) – Ongoing claims for U.S. unemployment insurance have dipped faster in recent weeks in states ending federal benefits this summer than in states keeping the $300 weekly supplement in place until the fall, according to government data through last week.

From the week ending May 1 through the week ending June 12, continuing claims for state unemployment benefits fell 17.8% in the 26 states ending benefits early, to 990,000, and by 12.6%, to 2.18 million, in the rest of the country, according to a Reuters analysis of weekly federal unemployment data.

The data do not yet answer the larger and arguably more important question of whether hiring will also accelerate in those states, the outcome an almost all-Republican group of governors says is the goal of cutting the benefits early.

Weekly data from small business time provider Homebase through the week ending June 20 in fact has shown no pickup in hiring in the states cancelling unemployment benefits. To the contrary the other states appear to have added jobs faster in recent weeks – a possible consequence of the fact that large Democratic-led states like California and New York have recently lifted most of the remaining restrictions put in place to fight the pandemic.

The states stopping benefits as a group have also pulled closer to their pre-pandemic levels of unemployment, suggesting less room for improvement.

The issue of how unemployment benefits are impacting the recovery of the U.S. job market has become a core concern among Federal Reserve and other policymakers as they try to determine how fast national employment might rebound to pre-pandemic levels, a judgment hard to make until the economy is fully reopened and benefit levels returned to normal.

Twelve states have already halted benefits in what has been a largely partisan split between Republican governors arguing that the pandemic emergency unemployment payments are now discouraging people from working, and Democratic governors who feel people still need support as the pandemic wanes.

The states stopping benefits early include the entire Deep South, where pandemic unemployment has fallen hard on the large Black population, but only one state, Louisiana, with a Democratic governor. Only two Republican-led states, Vermont and Massachusetts in the Northeast, plan to continue the payments until they end nationwide in September.

The data overall suggest “more downward momentum in initial and continuing claims over the next few weeks,” said Jefferies economist Thomas Simons. Sky-high unemployment claims have been a hallmark of the pandemic, topping 23 million at one point in the spring of 2020 as the coronavirus took hold, more than 10 times the level at the start of the year.

(Reporting by Howard Schneider; Editing by Andrea Ricci)

U.S. leisure and hospitality pay surges to a record. Now will workers come?

By Jonnelle Marte and Ann Saphir

(Reuters) – Hotels, restaurants and other businesses are boosting pay as they try to rebuild their staffs and meet increasing demand from Americans ready to venture out as pandemic-related restrictions are lifted and more people are vaccinated.

But it is unclear if the increases will be sufficient to entice enough workers back to close the employment gap remaining in the sector hit hardest by COVID-19 job losses.

Average hourly earnings for workers in leisure and hospitality rose to $18.09 in May, the highest ever and up 5% from January alone, according to Labor Department data released on Friday. Pay rose even faster for workers in non-manager roles, who saw earnings rise by 7.2% from January, far outpacing any other sector.

That higher pay could be a sign that companies are lifting wages as they seek to draw people back to work after more than a year at home. Some businesses are struggling to keep up with higher demand as more consumers, now fully vaccinated, get back to flying, staying in hotels and dining indoors. Job gains in leisure and hospitality this year have so far outpaced gains in other sectors.

But it is too soon to know whether the boost will be enough to help speed up hiring at a time when many workers are still facing other obstacles, including health concerns and having to care for children and other relatives.

“The fact of the matter is, the pandemic is still going on,” said Daniel Zhao, a senior economist for Glassdoor. “The economy is running ahead of where we are from a public health situation.”

Some 2.5 million people said they were prevented from looking for work in May because of the pandemic, according to the Labor Department. And just about 40% of Americans are now fully vaccinated, meaning that many workers may still be concerned about the health risks they might face on the job, Zhao said.

STILL IN A HOLE

Employment in leisure and hospitality is still in a deep hole when compared with pre-pandemic levels.

The industry added 292,000 jobs in May, with about two-thirds of that hiring happening in restaurants and bars. But overall employment is still down 2.5 million jobs, or 15% from pre-pandemic levels, more than any other industry.

If job gains continued at the pace seen in May, it would take more than eight months to replace the jobs lost. And it’s not yet clear that all of the jobs will be recovered, especially if business travel remains depressed or if other habits change after the pandemic.

Some people who previously worked at hotels or restaurants moved on to other types of jobs during the pandemic, such as packaging goods at a warehouse, and it’s too soon to know whether they will switch back as more of the economy reopens, said Zhao.

Some Republicans and businesses struggling to find workers say generous unemployment benefits are slowing down the labor market recovery by making it easier for workers to stay home. Others say the benefits may be helping workers cover the bills while they wait for schools to reopen, receive vaccinations and resolve other obstacles that made it difficult for them to work during the pandemic.

“People were making decisions based on those other factors, but they had the wherewithal to make those choices because of the extended unemployment benefits,” Cleveland Federal Reserve Bank President Loretta Mester said during an interview with CNBC.

Either way, any frictions caused by unemployment benefits may be resolved over the next several months as those benefits are reduced. About half of states are putting an early end to a $300 federal supplement to weekly unemployment benefits, winding them down as soon as June 12. The supplement expires nationwide on Sept. 6.

(Reporting by Jonnelle Marte and Ann Saphir; Editing by Chizu Nomiyama and Jonathan Oatis)

U.S. job openings jump to two-year high in boost to labor market

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job openings rose to a two-year high in February while hiring picked up as strengthening domestic demand amid increased COVID-19 vaccinations and additional pandemic aid from the government boost companies’ needs for more workers.

The Labor Department’s monthly Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday was the latest indication that the labor market had turned the corner after shedding jobs in December as the nation buckled under a fresh wave of COVID-19 infections and depleted government relief.

“Labor demand should continue to heat up as companies brace for a post-pandemic burst in pent-up demand,” said Lydia Boussour, lead U.S. economist at Oxford Economics in New York.

Job openings, a measure of labor demand, increased 268,000 to 7.4 million as of the last day of February. That was the highest level since January 2019 and pushed job openings 5.1% above their pre-pandemic level.

The second straight monthly rise in vacancies lifted the jobs openings rate to a record 4.9% from 4.7% in January.

There were an additional 233,000 job openings in the health care and social assistance industry. Vacancies in the accommodation and food services sector, one of the industries hardest hit by the pandemic, increased by 104,000 jobs. Arts, entertainment and recreation job openings rose 56,000.

But vacancies decreased in state and local government education as well as educational services and information.

Economists polled by Reuters had forecast job openings would rise to 6.995 million in February. The report followed on the heels of news on Friday that the economy added 916,000 jobs in March, the most in seven months.

The labor market is being boosted by an acceleration in the pace of COVID-19 vaccinations and the White House’s recently passed $1.9 trillion pandemic relief package, which is sending additional $1,400 checks to qualified households and fresh funding for businesses.

Demand for labor could increase further as more services businesses reopen. The U.S. Centers for Disease Control and Prevention said on Friday fully vaccinated people could safely travel at “low risk.”

An Institute for Supply Management survey on Monday showed services businesses reporting they “have recalled everyone put on waivers and made new hires” and had “additional employees added to service the needs of new customers at new locations.”

STIFF COMPETITION

In February, hiring rose 273,000, the largest gain in nine months, to 5.7 million. That boosted the hiring rate to 4.0% from 3.8% in January. Hiring was led by the accommodation and food services industries, which increased by 220,000 jobs. But hiring decreased in state and local government education.

Hiring still has a long way to go, with employment 8.4 million jobs below its peak in February 2020.

“The labor market continues to improve but remains a long way from what the Federal Reserve would describe as the conditions to restore maximum employment,” said John Ryding, chief economic advisor at Brean Capital in New York.

The U.S. central bank has signaled it would maintain its ultra-easy monetary policy stance for a while to allow complete healing.

With unemployment well above pre-pandemic levels, competition for jobs remains tough. There were 1.4 unemployed people for every open job in February, well above 0.82 on the eve of the first wave of the pandemic lockdowns 12 months ago.

“This means employers will have an easier time hiring, but job seekers still don’t have the bargaining power they did prior to the pandemic,” said Nick Bunker, director of research at Indeed Hiring Lab.

Layoffs increased to 1.8 million from 1.7 million in January amid job cuts in the finance and insurance industry. The layoffs rate was unchanged at 1.2%.

Risks remain to the brightening labor market outlook.

“New strains of the virus and unwillingness to abide by health recommendations could extend the impact of the pandemic on the economy,” said Sophia Koropeckyj, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “In addition, the severity of the downturn, which closed many business, means that many industries will not bounce back immediately.”

The number of people voluntarily quitting their jobs rose to 3.4 million from 3.3 million in January. The quits rate was unchanged at 2.3%.

The quits rate is normally viewed by policymakers and economists as a measure of job market confidence. But the pandemic has forced millions of women to drop out of the labor force mostly because of problems related to child care, with many schools still only offering online learning.

(Reporting by Lucia Mutikani; Editing by Paul Simao)