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As infections ebb and vaccinations spread, the economy has started to regain its footing, but job growth has bounced up and down in recent months.
Credit…James Estrin/The New York Times

Hiring accelerated in May, with the government reporting on Friday that employers added 559,000 workers, about twice the previous month’s gains.

The unemployment rate fell to 5.8 percent, the Labor Department reported.

As infections ebb, vaccinations spread and businesses reopen, the economy has started to regain its footing, but the path has not been smooth. Job growth bounced up and down in recent months, and may continue its uneven progress throughout the summer, analysts said.

“It’s probably going to be a bumpy ride from here till September,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

Job postings on the online jobs site Indeed were up 27 percent at the end of May from their level in February 2020, before the pandemic hit.

Nearly half of small-business owners surveyed by the National Federation of Independent Business in May said they were struggling to fill slots. Many employers have blamed enhanced pandemic-related unemployment benefits for the shortage of workers, which has prompted 25 Republican-led states withdraw from some or all of the federal jobless assistance programs in the coming weeks, months ahead of their expiration.

Most economists have pushed back against this argument and say the reality is more complicated. A lack of child care, continuing health concerns, low wages and competing priorities all probably play a larger role, they say.

“Is there a labor shortage?” Ms. Farooqi asked. “In my mind, absolutely not. There is a ramping-up effect, and that is going to persist for a little bit. You have to expect some frictions.”

At the beginning of the pandemic, job postings plummeted much faster than job searches, said Julia Pollak, a labor economist at the online jobs site ZipRecruiter. Now, there is a similar dynamic: Postings have picked up much more quickly than search activity.

“It’s just a matter of time,” said Ms. Pollak, who pointed out that many prime-age workers were only recently able to get their first Covid-19 vaccination.

She also said there was a mismatch between the type of jobs being offered and those being searched for. More than half of seekers want remote work, while only 10 percent of employers are offering that option.

Ben Casselman headshot

2 minutes ago

Ben Casselman

Job growth picked up in May, but was still weaker than in March. The big picture: we’re still down 7.6 million jobs from before the pandemic.

Jeanna Smialek headshot

4 minutes ago

Jeanna Smialek

The Fed was hoping for a “string” of million-ish jobs numbers. They are having to settle for something a lot more lackluster.

Neil Irwin headshot

5 minutes ago

Neil Irwin

Put it all together, and this is an economy that is healing, but not with the kind of robust, hot vaccine summer boom that I had expected before the April jobs report.

Neil Irwin headshot

5 minutes ago

Neil Irwin

The labor force participation rate actually edged down. That is consistent with the story that people are holding back, not re-entering the workforce en masse despite the economy re-opening.

Ben Casselman headshot

7 minutes ago

Ben Casselman

Unemployment rate fell for “good” reasons in that employment was up, unemployment was down. But labor force was basically flat (actually down slightly), which will add fuel to “labor shortage” concerns.

Jeanna Smialek headshot

9 minutes ago

Jeanna Smialek

Headline job gains were super close to consensus, labor force participation was little changed, and the number of people who are working part time for economic reasons was stable. Whatever you thought about the job market yesterday is unlikely to change too much on this report.

Ben Casselman headshot

12 minutes ago

Ben Casselman

The unemployment rate fell for “good” reasons in that employment was up, unemployment was down. But labor force was basically flat (actually down slightly), which will add fuel to “labor shortage” concerns.

Neil Irwin headshot

13 minutes ago

Neil Irwin

The revision to April jobs growth is only up 278,000. Nothing special — I suspected we might see a much bigger upward revision.

Ben Casselman headshot

15 minutes ago

Ben Casselman

U.S. employers added 559,000 jobs in May. The unemployment rate fell to 5.8%.

Employers across the country in recent months have complained that they cannot find enough workers, despite an unemployment rate that remains higher than before the pandemic.

Not all workers may come rushing back as the pandemic recedes. Some older workers have probably retired. Other families may have discovered they can get by on one income or on fewer hours. That could allow labor shortages to persist longer than economists expect, Ben Casselman reports for The New York Times.

The simplest way to track the supply of available workers is the labor force participation rate, which reflects the share of adults either working or actively looking for work. Right now it shows plenty of workers available, although the Labor Department doesn’t provide breakdowns for specific industries.

Another approach is to look at the ratio of unemployed workers to job openings, which provides a rough measure of how easy it is for businesses to hire (or, conversely, how hard it is for workers to find jobs). Data from the Labor Department’s Job Openings and Labor Turnover Survey comes out a month after the main employment report, but the career site Indeed releases weekly data on job openings that closely tracks the official figures.

Both those approaches have a flaw, however: People who want jobs but aren’t looking for work don’t count as unemployed. Constance L. Hunter, chief economist for the accounting firm KPMG, suggests a way around that problem: the number of involuntary part-time workers. If companies are struggling to find enough workers, they should be offering more hours to anyone who wants them, which should reduce the number of people working part time because they can’t find full-time work.

“The data is not necessarily going to be as informative as it would be in a normal recovery,” Ms. Hunter said. “I would not normally tell you coming out of a recession that I’m going to be closely watching involuntary part-time workers as a key indicator, but here we are.”

Sharon McCown, a Target employee in Louisville, Ky., received hazard pay as well as a raise, which helped her to save more money than she otherwise would have been able to.
Credit…Luke Sharrett for The New York Times

Workers in retail, hospitality and other service industries bore the brunt of last year’s mass layoffs. But unlike low-wage workers in past recessions, whose earnings power eroded, many of those who held on to their jobs saw their wages rise even during the worst months of the pandemic.

Now, as the economy bounces back and employers need to find staff, workers have the kind of leverage that is more typical of a prolonged boom than the aftermath of a devastating recession. Average earnings for nonmanagers in leisure and hospitality hit $15 an hour in February for the first time on record; in April, they rose to $15.70, a rise of more than 4.5 percent in just two months.

President Biden’s administration is embracing those gains and hoping they shift power away from employers and back toward workers. And Federal Reserve officials have indicated that they would like to see employment and pay rising, because those would be signs that they were making progress toward their goals of full employment and stable prices.

The stage is set for an economic experiment, one that tests whether the economy can lift laborers steadily without igniting much-faster price increases that eat away at the gains.

“Instead of workers competing with each other for jobs that are scarce, we want employers to compete with each other to attract workers,” Mr. Biden said in Cleveland last week. “When American workers have more money to spend, American businesses benefit. We all benefit.”

Margrethe Vestager, the European Union’s executive vice president in charge of competition policy, said Facebook’s “vast troves of data” on its users enabled it “to target specific customer groups.”
Credit…Pool photo by Francisco Seco

LONDON — European Union and British regulators said Friday that they were beginning separate antitrust inquiries into Facebook, broadening their efforts to rein in the world’s largest technology companies.

The investigations by the European Commission, the executive arm of the 27-nation bloc, and Britain’s Competition and Markets Authority, take aim at a key business strategy used by Facebook and other large tech companies: to use their size and power in one area to enter others. Amazon took its position as the largest online retailer to become a major player in video streaming. Apple leveraged the iPhone to be one of the world’s largest mobile payments with Apple Pay. Google parlayed its dominance as a search engine into many different areas.

The regulators said they would start formal investigations of Facebook Marketplace, an eBay-like service introduced in 2016 for users to buy and sell products. Under scrutiny is whether Facebook’s cross-promotion of Marketplace to the more than two billion users of its main social network gave the company an unfair advantage over rivals in violation of European Union competition laws.

Margrethe Vestager, the European Union’s executive vice president in charge of competition policy, said Friday that Facebook collects “vast troves of data” on the activities of its users, “enabling it to target specific customer groups.”

“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector,” she said in a statement, “where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data.”

“In today’s digital economy, data should not be used in ways that distort competition,” she said.

In Britain, antitrust regulators are already investigating the company’s advertising practices. On Friday, the competition regulator said it was looking at Facebook Marketplace and Facebook Dating, a service introduced in Europe last year. The British regulator said it would work with the European Commission, though the investigations are independent of each other.

Facebook defended its business practices in a statement on Friday. “Marketplace and Dating offer people more choices and both products operate in a highly competitive environment with many large incumbents,” a representative of Facebook said. “We will continue to cooperate fully with the investigations to demonstrate that they are without merit.”

The announcements are the beginning of formal investigations that may take years to complete.

A preliminary investigation had already been underway, with the European Commission sending questions to Facebook’s rivals. Last year, Facebook sued the European Commission over demands made by regulators to turn over documents and data, saying the materials sought were overly broad and included highly sensitive information about employees. Facebook said it provided more than one million documents related to the Marketplace investigation.

The inquiry adds to the regulatory challenges Facebook is facing around the world. In December, the Federal Trade Commission announced antitrust charges against Facebook for illegally buying up smaller rivals to stamp out competition. Australian regulators have filed a similar suit. German antitrust regulators also brought charges against Facebook over data collection, a case now under appeal.

Since leaving the European Union, Britain is ramping up its own efforts to regulate how large tech firms use their size to enter new sectors and the problems that poses for regulations. Last year, the competition authority published a report that called for tougher oversight of Facebook and Google, particularly their dominance in online advertising. Britain is considering the creation of a new regulatory agency tasked with overseeing the biggest tech companies. This year, Britain started antitrust investigations into Google and Apple’s App Store.

European Union regulators have been perhaps the world’s most aggressive tech industry watchdog. In November, regulators filed preliminary charges against Amazon for unfairly using its size and access to data to harm smaller merchants. In May, charges were also filed against Apple over anticompetitive App Store policies.

In addition to the antitrust investigations, Ms. Vestager is leading an effort in the European Union to pass new laws to make the tech industry regulated more like industries such as banking or transportation, a process that could take until 2022 or beyond to complete. The proposed laws would make it easier for regulators to intervene in the digital economy, including potential restrictions around how companies leverage their size to enter new markets. Facebook and others could also face new legal requirements for moderating user-generated content post to their platforms.

Eshe Nelson contributed reporting from London.

William Ackman, the chief executive of Pershing Square Tontine Holdings, a special purpose acquisition vehicle.
Credit…Drew Angerer for The New York Times

William Ackman’s jumbo special purpose acquisition company has finally found its big deal: It is closing in on an agreement to buy a 10 percent stake in Universal Music Group, the home of artists like Taylor Swift, at a $42 billion valuation.

If completed, the transaction would be the biggest involving such a fund, known as a SPAC, to date — and it would certainly be among the most complex, the DealBook newsletter notes.

Mr. Ackman’s SPAC, Pershing Square Tontine Holdings, would invest $4 billion for a 10 percent stake in Universal, of which the French conglomerate Vivendi owns 80 percent and China’s Tencent owns 20 percent.

There would still be $1.5 billion left in the SPAC, and that would be rolled into a new publicly traded vehicle into which Ackman’s Pershing Square hedge fund could put more money. That vehicle would then look for another acquisition target.

Vivendi had already been planning to take Universal public in Amsterdam; those plans will go ahead, meaning that unlike a traditional SPAC deal, Pershing Square Tontine won’t give Universal its stock listing. SPAC investors would instead get Universal’s shares when it later goes public.

The complex transaction is unlike any other SPAC deal, and in many ways doesn’t resemble a SPAC at all. Vivendi is a clear winner, because it would get another major investor for Universal at a higher valuation than Tencent had given the music label earlier this year.

The outcome for Pershing Square Tontine’s various investors is more complicated. Mr. Ackman’s hedge fund would end up owning 29 percent of the so-called SPARC, which stands for special purpose acquisition rights company, giving it a greater percentage of the vehicle than it had in the original SPAC.

SPAC investors would receive a stake in the new vehicle, which would not have a two-year limit to find a deal like a traditional SPAC. Assuming that various financial maneuvers are fulfilled, the new fund could have up to $10.6 billion to spend on a new takeover.

But investors would not get a vote on the SPAC’s Universal deal — if one is reached — or whatever future transaction the SPARC makes. And there is no guarantee that the SPARC will find a suitable deal, especially since Pershing Square Tontine had struggled to identify a suitable target.

Shares in Pershing Square Tontine plunged 14 percent in after-hours trading on Thursday after news reports about the Universal transaction emerged, but were down 7 percent in premarket trading on Friday. They remain above the blank-check firm’s $20 I.P.O. price, but down from a high of more than $30 a few months ago.

Stocks on Wall Street were poised to climb after the Labor Department’s monthly jobs report showed an increase in hiring in May compared with a surprisingly low number the month before.

U.S. employers added 559,000 jobs in May, the government said and the unemployment rate fell to 5.8 percent. Analysts surveyed by Bloomberg expected the report to show that employers added 650,000 jobs last month. Investors and policymakers are trying to deduce what is happening in the labor market, in which millions of people are unemployed but some employers say they are struggling to hire.

Travel and tourism stocks fell in Europe after Britain removed Portugal from the list of countries people could travel to without quarantining on their return. Britain also didn’t add any new countries to the list, citing rising coronavirus cases.

Shares in Rolls-Royce, which makes and services engines for airliners, fell 3 percent, the worst performer in the FTSE 100 in Britain. IAG, which owns British Airways, dropped 1.3 percent after falling 5.4 percent on Thursday when the changes to the travel list were announced. EasyJet and Wizz Air shares declined about 6 percent this week.

Facebook edged lower in premarket trading after the European Union and British regulators said they were investigating the company for possible antitrust violations, particularly relating to Facebook Marketplace, its classified ads service.

Oil prices rose. Futures on West Texas Intermediate, the U.S. crude benchmark, climbed 0.5 percent to $69.18, the highest since late 2018.

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