US companies hired the most workers in 10 months in June, raising wages and offering incentives to entice millions of unemployed Americans sitting at home, in a tentative sign that a labor shortage hanging over the economy was starting to ease. The US nonfarm payroll created a robust 850,000 new jobs in June, well above market expectations for a 700,000 gain. Meanwhile, the change in total nonfarm payroll employment for April was revised down by 9,000, from 278,000 to 269,000, and the change for May was revised up by 24,000, from 559,000 to 583,000. With these revisions, the economy created 15,000 more jobs in April and May.
Most of the new jobs were clustered in service-oriented positions at restaurants, hotels, retailers and the like. Businesses in leisure and hospitality that suffered the worst in the early stages of the pandemic added the most new jobs last month and hired 343k new workers in June with over half of the job gains were in restaurants and bars, which added back 194k workers. Leisure and hospitality employment is still down 12.9%, or 2.2 million jobs, versus pre-pandemic levels. Public and private education also saw healthy gains as hiring improved in local government education (+155k), state government education (+75k) and private education (+39k). Healthy job gains were also seen in professional and business services (+72k), retail trade (+67k) and other services (+ 56k). Manufacturing employment was little changed in June (+15k) and the construction sector shed jobs (-7k), as losses in non-residential construction outweighed gains in residential.
However, the unemployment rate ticked up to 5.9% from 5.8% in May. The slight uptick in the unemployment rate was driven by a modest increase in the number of unemployed. The labor force participation rate was unchanged at 61.6%. In June, the average wage rose 0.3% mom and 3.6% over the past year.
Both the unemployment rate, at 5.9%, and the number of unemployed persons, at 9.5 million, were little changed in June. These measures are down considerably from their recent highs in April 2020 but remain well above their levels prior to the COVID-19 pandemic (3.5% and 5.7 million, respectively, in February 2020). The slight uptick in the unemployment rate was driven by a modest increase in the number of unemployed (+168k). Women continued to trickle back, with 148k re-joining the labor force. That lifted women's labor force participation rate to 57.5% from 57.4%. Notably, the number of “job leavers”, i.e., quits, rose quite strongly on the month (+164k) as did the number of re-entrants to the labor force (+149k). However, the labor force participation rate and employment-to-population ratio remained unchanged at 61.6% and 58.0% respectively. Work life continues to normalize as the share of people teleworking fell to 14.4% in June, down from 16.6% in May. Among those not in the labor force, 1.6 million were prevented from looking for work due to the pandemic, down from 2.5 million in May. The jobless rate continued to be understated by people misclassifying themselves as being "employed but absent from work." Without this misclassification, the unemployment rate would have been 6.1% in June. But the number of people working part-time for economic reasons declined 644k. As a result, a broader measure of unemployment (U6), which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, dropped to a 15-month low of 9.8% from 10.2% in May.
Amid the rise in total employment, wage gains also accelerated. Average hourly earnings increased 0.3% mom led by low-wage industries, after gaining 0.4% in May. That raised the year-on-year increase in wages to 3.6% from 1.9% in May. Annual wage growth was in part flattered by so-called base effects following a big drop last June.
Source: BIMB Securities Research - 5 Jul 2021
Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 09, 2024
Created by kltrader | Aug 09, 2024