Employment report June 2021:
Job growth jumped in June as businesses sought to keep pace with the rapid recovery in the US economy, the Labor Department reported on Friday.
Non-farm wages rose 850,000 for the month, up from the Dow Jones estimate of 706,000 and better than the revised upward 583,000 in May. The unemployment rate, however, rose to 5.9% against 5.6% expected.
The increase in the unemployment rate occurred even though the participation rate remained unchanged at 61.6%. A separate figure that takes into account discouraged workers and those in part-time jobs for economic reasons fell sharply to 9.8%, with the 0.4 percentage point drop placing the so-called real unemployment rate below 10% for the first time since March 2020.
Markets rose on the news, with futures on major indexes showing modest gains to open ahead of the holiday weekend.
“From a market perspective, this is a very positive employment report,” said Seema Shah, chief strategist at Principal Global Investors. “Today’s improvement likely reflects a slight easing of labor supply constraints that have held back the labor market in recent months, as well as the continued momentum of economic reopening.”
Hiring has accelerated as the second quarter has turned into a summer that will see a closer return to normal for Americans held captive in the past year due to restrictions linked to the pandemic.
As data continues to rise, economists expect second-quarter GDP growth to approach 10%, an astonishing continuation of a rebound helped by vaccines that have sharply reduced rates of Covid cases -19 as well as hospitalizations and deaths.
The latest figures bring the total number of jobs recovered after the pandemic to 15.6 million. More than 22.3 million Americans were laid off in March and April 2020 due to government-imposed trade restrictions, and total employment remains 7.13 million lower than in February 2020 .
The hotel industry continued to be the main beneficiary of the reopening, with workers returning to work in bars, restaurants, hotels, etc.
The industry recorded a gain of 340,000 in easing restrictions across the country. That total included 194,000 bars and restaurants, but still left the sector at 2.2 million less than in February 2020 before the start of the pandemic.
Other notable gains were in education, which totaled 269,000 hires at state, local and private levels, while professional and business services increased by 72,000 and retailing added 67,000.
The other services industry created 56,000 jobs, including a gain of 29,000 in personal and laundry services, a subsector that was seen as an indicator of the resumption of normal business activity. Social assistance added 32,000, while wholesaling contributed 21,000 in total and mining increased by 10,000.
Manufacturing edged up 15,000 for the month, although construction lost 7,000 jobs despite a sizzling housing industry where new buildings were hampered by supply shortages and soaring timber prices before the recent fall.
Amid the rise in total employment, wage gains also accelerated.
Average hourly earnings rose 0.33% for the month and 3.6% year-on-year, both in line with Dow Jones estimates.
Overall wage growth had been skewed during much of the pandemic, as low-income workers in high-contact industries like the hospitality industry were left on the sidelines. June’s gain puts the labor market ahead of its previous pace; The average hourly wage rose 3% in February 2020 year-over-year as low-income workers were finally seeing gains after a generation of stagnant wages.
This is last minute news. Please come back here for updates.
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