U.S. Jobs Jump by Most in 10 Months
Non-farm payrolls increased by 850,000 in June, bolstered by strong job gains in leisure and hospitality.
The pace of U.S. hiring accelerated in June, with payrolls gaining the most in 10 months, suggesting businesses are having greater success recruiting workers to keep pace with the economy’s reopening.
Non-farm payrolls increased by 850,000 last month, bolstered by strong job gains in leisure and hospitality, a Labor Department report showed Friday. The unemployment rate edged up to 5.9 percent because more people voluntarily left their jobs and the number of job seekers rose. The median prediction in a Bloomberg survey of economists had been for a 720,000 rise in June payrolls.
“Things are picking up,” said Nick Bunker, an economist at the job-search company Indeed. “While labor supply may not be as responsive as some employers might like, they are adding jobs at an increasing rate.”
Demand for labor remains robust as employers strive to keep pace with a firming economy, fueled by the lifting of restrictions on business and social activity, mass vaccinations, and trillions of dollars in federal relief. At the same time, a limited supply of labor continues to beleaguer employers, with the number of Americans on payrolls still well below prepandemic levels.
Coronavirus concerns, child care responsibilities, and expanded unemployment benefits are all likely contributing to the record number of unfilled positions. Those factors should abate in the coming months though, which will support future hiring.
Wage growth is also picking up as businesses raise pay to attract candidates. The June jobs report showed a hefty 2.3 percent month-over-month increase in nonsupervisory workers’ average hourly earnings in the leisure and hospitality industry. Overall average earnings rose 0.3 percent last month.
Fed Policy
The gain in payrolls, while well above expectations, doesn’t markedly raise pressure on the Federal Reserve to pare monetary policy support for the economy. Even with the latest advance, U.S. payrolls are still 6.76 million below their prepandemic level.
For President Joe Biden’s administration, the report offers some relief after prior months showed disappointing job gains.
The Labor Department’s figures showed a 343,000 increase in leisure and hospitality payrolls, a sector that’s taking longer to recover because of the pandemic. Job growth last month was also bolstered by a 188,000 gain in government payrolls. State and local government education employment rose about 230,000, boosted by seasonal adjustments to offset the typical declines seen at the end of the school year.
Hiring was relatively broad-based in June, including other notable gains in business services and retail trade. Construction payrolls dropped for a third straight month, and manufacturing employment rose less than forecast.
“Most of the new jobs now being created are in sectors that were slammed by the pandemic, while companies in other industries are struggling to find available workers,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note.
The overall participation rate held steady and remained well short of prepandemic levels. The employment population ratio, or the share of the population that’s currently working, was also unchanged.
Digging Deeper
- Average weekly hours decreased from 34.8 hours to 34.7.
- The participation rate for women ages 25–54 rose by 0.4 percentage point; the rate among men in that age group also climbed.
- The number of Americans classified as long-term unemployed, or those who have been unemployed for 27 weeks or more, increased by the most since November.
- The U-6 rate, also known as the underemployment rate, fell to a pandemic low of 9.8 percent. The broad measure includes those who are employed part time for economic reasons and those who have stopped looking for a job because they are discouraged about their job prospects.
—With assistance from Kristy Scheuble & Sophie Caronello.
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