U.S. Labor Reshuffle Has More Room to Run, Fueling Higher Wages

The pandemic spurred a historic change in consumer demand, pushing up wages and reshuffling America’s workforce in a way that’s unlikely to reverse anytime soon.

Two years after the onset of Covid-19, the labor market has adapted to reflect shifts in spending that’s heavier on goods and lighter on services. Hiring has boomed in transportation and warehousing, and payrolls in retail trade, which saw some of the worst job losses in early 2020 when lockdowns shuttered storefronts, are now higher than before the health crisis.

Meantime, the enormous leisure and hospitality sector remains 1.5 million jobs short of ...