US adds 850,000 jobs in June, the most in 10 months as hiring gains pace
US job growth accelerated in June, with payrolls gaining the most in 10 months, suggesting firms are having greater success recruiting workers to keep pace with the broadening of economic activity.
Non-farm payrolls increased by 850,000 last month the unemployment rate edged up to 5.9 per cent, a Labor Department report showed Friday. May payrolls were revised up to a 583,000 gain. The labor force participation rate held steady remained well short of pre-pandemic levels.
The median estimate in a Bloomberg survey of economists was for a 720,000 rise in June payrolls. S&P stock index futures climbed Treasury securities fluctuated after the report.
Demfor labor remains robust as firms strive to keep pace with broader economic growth, fueled by the lifting of restrictions on business social activity, mass vaccinations 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 pre-pandemic levels. Coronavirus concerns, child care responsibilities expanded unemployment benefits are all likely contributing to the record number of unfilled positions.
Those factors should abate in the coming months though, supporting future hiring. Wage growth is also picking up. A report Thursday showed small companies are raising compensation to attract workers, consistent with similar developments at larger firms such as FedEx Corp. Olive Garden parent Darden Restaurants Inc.
The June jobs report showed a 2.3 per cent month-over-month increase in average hourly earnings in the leisure hospitality industry. Overall average earnings rose 0.3 per cent last month.
“Job gains should pick up in coming months as vaccinations rise, easing some of the pandemic-related factors currently weighing them down,” Federal Reserve Chair Jerome Powell told Congress on June 22.
While net job creation has been lower, actual hiring is high, offset by elevated levels of quits retirements, Powell said. That underscores elevated churn in the labor market.
Over the course of the downturn the Fed has emphasized its commitment to the maximum employment part of its dual mandate, but inflation concerns paired with a steady stream of solid employment reports may influence how soon policy makers tighten monetary policy.
The Labor Department’s figures showed a 343,000 increase in leisure 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 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.
Even with the latest advance, US payrolls are still 6.76 million below their pre-pandemic level, underscoring how the labor market is far from fully recovered.
The overall participation rate was unchanged at 61.6 per cent. The employment population ratio, or the share of the population that’s currently working, was also unchanged.
The unemployment rate edged up because more people voluntarily left their jobs the number of job seekers rose.
Average weekly hours decreased to 34.7 hours from 34.8.
–With assistance from Kristy Scheuble Sophie Caronello.