The U.S. economy added 850,000 jobs in June, a strong showing after two disappointing months of employment growth that had sparked criticism from Republicans that the Biden administration was stifling a labor market revival.
The report from the Labor Department marked a significant improvement over May’s 583,000 job gain and beat Wall Street expectations of about 700,000. The unemployment rate was little changed at 5.9 percent.
“Things are picking up. All that employer demand is turning into jobs and higher wages for many workers,” wrote Nick Bunker, economic research director for the job-listing platform Indeed. “This pace of progress is solid and it looks like things can get even better.”
The report is likely to ease some pressure on President Joe Biden over the labor market's slower-than-expected recovery. The GOP has hammered Biden over generous federal jobless benefits, which governors and lawmakers say are among the reasons workers have been reluctant to reenter the market.
At the same time, the number is probably not strong enough to change the view of Federal Reserve Chair Jerome Powell that the economy continues to require emergency assistance in the form of rock-bottom interest rates until the labor market heals even further. Both Biden and Powell have largely staked their futures on the argument that rising inflation will prove only temporary and that even more federal spending and easy money policies are needed to help address structural problems holding back the economy.
While the June jobs figure would be considered healthy during normal economic times, it is still nowhere near the kind of growth needed to quickly restore the millions of jobs that remain missing since Covid slammed the U.S. in spring 2020. The U.S. is still about 7 million jobs short of February 2020 levels.
Analysts suggest the economy would be adding well over a million jobs per month right now if employers could find all the workers they want.
The leisure and hospitality industry, which has complained of a labor shortage, saw the largest gains, adding 343,000 jobs last month. Overall, wages grew 0.3 percent from the previous month, in line with expectations, and are now up 3.6 percent from this time last year. That figure may need to rise even more to get more workers off the sidelines.
Aberdeen Standard Investments deputy chief economist James McCann said the report “should be taken as a sign of things to come for an accelerating labor market” and “confirms the suspicion that a lot of the barriers keeping people out of the labor market are falling away.”
Below the top-line numbers, other key indicators of the labor market’s health showed some improvement over last month but still suggest that the economic recovery is uneven by industry, gender and race.
Unemployment among women and Black Americans, who made up a disproportionate share of the jobs lost to the pandemic because of the lockdowns’ hit to service-sector jobs, ticked up in June after both groups added more workers.
The labor force participation rate, which measures how many people are currently working or actively seeking work, didn’t budge, though the overall labor force did increase by 151,000. However, participation among Black workers did rise to 61.6 last month from 60.9 in May.
"June’s better-than-expected payroll gains provide some needed reassurance that the healing of the job market remains a work in progress,” said Mark Hamrick senior economic analyst for financial services company Bankrate.
Republicans have blamed enhanced pandemic unemployment benefits for keeping Americans from going back to work. Federal programs offer an extra $300 a week to the jobless and broadly extend eligibility to most laid-off workers.
So far, 26 states, nearly all GOP-led, have opted to end their participation in the federal programs weeks before the September expiration date, although the effect of those moves barely showed up in the June report. Lawsuits against those actions have been filed in Maryland, Texas and Indiana.
A state court in Indiana issued a preliminary injunction last week requiring the state to continue paying out the benefits until it fully considers the case.
Still, the number of workers filing new claims for unemployment benefits has been steadily falling in recent weeks, according to data from the Labor Department, and economists have found no real sign that ending the benefits spurred a surge in employment.
However, the job growth did not appear to be strong enough in June to pull those who have been unemployed the longest off the sidelines.
The number of long-term unemployed, or workers who have been jobless for more than six months, increased by 233,000 to 4 million last month, after falling in May.
U.S. job gains surge, easing pressure on Biden over labor market - POLITICO
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