The June employment report showed that the job market was warming as the summer kicked off and employers added 850,000 jobs.
While it wasn’t a pre-July 4 fireworks display, Friday’s figures from the Department of Labor showed that the US economic recovery from the coronavirus pandemic was accelerating with a long road ahead.
Here are five great takeaways from the June jobs report.
Job numbers soar at crucial moment for Biden
Job growth has not reached the more than 1 million monthly gains that many economists had anticipated, but the June report clearly showed that the US is moving faster towards a full recovery.
“This is historic progress, taking our economy out of its worst crisis in 100 years, driven in part by our dramatic progress in vaccinating our nation and curbing the pandemic, as well as other elements of the US bailout plan,” Biden said in a statement. statement. comments from the White House after the jobs report was released.
“Simply put, our economy is on the move and we have COVID-19 on the run,” he added.
While one jobs report won’t be enough to bolster Biden’s agenda, it could be helpful in ongoing negotiations on infrastructure spending, the debt ceiling and other areas where Republicans are eager to grab signs of a slowing recovery.
Service sector boosts job growth
Much of the job growth in June came in sectors hardest hit by COVID-19 that have seen rising demand in recent months.
The leisure and hospitality sector led all sectors with 343,000 jobs, 190,000 of which were in restaurants and bars alone. Manufacturing employment is still down about 13 percent from February 2020 – the majority of all sectors, according to indeed — making it a crucial barometer of recovery.
Daycare centers have also added 25,000 jobs, an encouraging sign for the economy in general as many parents were pushed out of the workforce for not having childcare options.
“This combination of job creation and returning workers is a good thing and illustrates that the growing confidence of people seeking employment at higher wages is well placed,” said RSM chief economist Joe Brusuelas, adding that the leisure and hospitality gains “are well placed.” fears that government policies are hindering the return of workers to the labor market.”
Pandemic-related restrictions appear to be easing
In June, there was a significant drop in the number of people barred from full-time work for reasons related to COVID-19, including health concerns and childcare responsibilities.
The number of Americans who said last month a COVID-19-related reason prevented them from seeking work fell to 1.6 million, from 2.5 million in May. The number of people who work part-time while preferring to work full-time also fell by 644,000 to 4.6 million.
Declines in both groups indicate that more people can return to work at a time when companies are struggling to fill vacancies that meet demand. Still, it wasn’t enough to increase labor force participation or get enough workers off the sidelines to reverse two troubling trends.
Labor force size falters as long-term unemployment rises
The employment rate has fluctuated between 61.4 and 61.7 percent for a year and June was no exception. The percentage of eligible workers in employment or seeking work stood at 61.6 percent last month and the employment-to-population ratio remained at 58 percent.
Economists expect both to increase as the US progresses further in the recovery and fully reopens schools, freeing up more parents to return to work. But last month, another 233,000 Americans became long-term unemployed, which could hinder their return to the job market.
“Many people who lost their jobs at the start of the pandemic have been unemployed since then. If jobs come back, they will get work, but there is still a huge job shortage,” Heidi Shierholz, policy director at the left-leaning Economic Policy Institute, said in a Twitter thread.
Recovery still has plenty of room to grow
The June jobs report was a welcome improvement from several months of less than stellar gains, but a crucial question is whether the labor market will continue to accelerate. The US has still lost nearly 7 million jobs since February 2020 and millions more if you count the jobs the economy would have added without the pandemic.
But economists are optimistic about the trajectory for 2021. For example, the International Monetary Fund sees the world’s largest economy grow by 7 percent this year, compared to a forecast of 4.1 percent in April.
“There is still quite a bit of damage to be done, but today’s report suggests we can rebuild sooner rather than later,” Nick Bunker, economic research director at Indeed, wrote Friday.