US economy adds 850,000 jobs in June


The US economy added 850,000 jobs in June, when adjusted for seasonal changes. That was much more than economists had expected and a signal that American job growth is accelerating.

It was the biggest monthly job gain since August 2020, when the economy added 1.6 million jobs.

The hospitality and leisure sector grew the strongest, having the most land to cover after the pandemic devastated the travel and service industries. The sector added 343,000 jobs. More than half are in restaurants and bars.

The number of education jobs also jumped in June. Local government hiring jumped 155,000 jobs, state government jobs increased 75,000, and private education positions rose 39,000. The sector has experienced a lot of fluctuation during the pandemic, distorting its seasonal patterns, making it harder to know what’s really going on month to month.

Nevertheless, June was a “bright” jobs report, although there is still much to worry about, Kate Bahn, interim chief economist at the Washington Center for Equitable Growth, wrote in a tweet. It “just means it’s a good foundation to grow on,” he added.

America’s once strong labor market is still far from normal, down 6.8 million jobs compared to February 2020. According to the report, 6.2 million people reported that they either did not work at all or worked less because their employers were affected. by the pandemic.

The story of two job markets

The unemployment rate stood at 5.9%, up from 5.8% in May, the Bureau of Labor Statistics reported Friday.

While the labor force participation rate was unchanged at 61.6%, the number of people who quit their jobs voluntarily to look for other positions jumped 164,000 to 942,000 in June — the highest level since November 2016.

This may seem counter-intuitive, but it could actually be a sign of worker empowerment: people who had few alternatives during the height of the pandemic, may be reconsidering their current workplace. And workers may need more time to decide to take a job now.

Usually, workers who quit their jobs are not eligible for benefits. But the pandemic has changed the rules a bit, making certain circumstances — such as child care issues or health conditions — reason that some benefits may remain in effect.

It’s an unbalanced job market story: Employers struggle to attract and retain staff as reopenings drive a hiring spike, as some workers are still not ready to return to work. Many fear infection, or worry about adequate care for their children or elderly relatives.

All this creates an unprecedented mismatch between supply and demand for workers.

It’s also the reason behind the recent increase in hourly earnings, as companies raise salaries to retain staff. Average hourly earnings rose 10 cents to $30.40 in June, a slightly smaller increase than the previous two months.

While many economists reject claims that pandemic-era unemployment benefits keep people comfortable at home and away from work, a number of states have cut special programs ahead of the September deadline.

But that hasn’t moved the needle much in June. Preliminary data from states ending the program suggest the move is not encouraging workers to continue their job search, said Cailin Birch, global economist at The Economist Intelligence Unit, in emailed comments.

After all 50 states scrapped the benefits in September, there could be a noticeable effect, he said. Benefits expire in 26 states at the end of July.

“However, beyond this, we expect several additional months of economic growth, more progress in Covid vaccination and the resumption of live education in September to be the main factors driving a stronger increase in labor force participation in the fall,” Birch added.

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Uneven recovery

While workers around the world are struggling during the pandemic, the economic hardship is being largely borne by low-income and non-white workers.

This is still reflected in the unemployment rate for this demographic group.

The unemployment rate for Asian workers rose to 5.8% in June, from 5.5% in May, registering the largest percentage point gain, although it remains below the level for the general population.

The unemployment rates for Hispanic and Black workers rose 0.1 percentage point, to 7.4% and 9.2%, respectively. This puts the rates for both populations well above the overall population.

White unemployment increased to 5.2% from 5.1% in May.

Women were also disproportionately affected last year, but they made up nearly half of job gains in June.