U.S. employers might have trouble hiring workers fast enough in coming months to keep up with the projected burst of economic growth.
Consumer spending at restaurants, hotels and salons is already starting to take off as the grip of the Covid-19 pandemic eases and more people get vaccinated and draw on their stimulus checks and savings.
But many economists expect economic activity to pick up faster than payrolls, at least initially, for several reasons, causing bottlenecks and wage pressures.
This happened last year for many manufacturers that experienced labor shortages as Americans working from home ordered more furniture, exercise equipment and other goods than before the pandemic. This year, it is likely to be the case particularly for providers of services requiring proximity to people, since they saw the biggest drops in business and employment during the pandemic and are poised to see the biggest rebound in demand this year.
Economists surveyed by The Wall Street Journal project U.S. gross domestic product — the value of all goods and services produced — will grow 6.4% this year, measured from the fourth quarter of last year to the same period of this year. That would lift output to nearly 4% above its pre-pandemic level measured in the fourth quarter of 2019.
Meanwhile, the economists expect employers to add 7.1 million jobs in the 12 months ending in December 2021, a gain of 5%. That would leave employment 1.6% lower than in the fourth quarter of 2019.