U.S. nonfarm payroll growth in June grew by 850,000 jobs, exceeding the Bloomberg consensus estimats of 700,000 jobs added by 150,000, pointing to a faster-than-expected acceleration. Additionally, private payrolls beat expectations of 600,000 jobs added by 62,000, according to the figures released Friday by the Bureau of Labor Statistics.
The unemployment rate, however, ticked up from May levels to 5.9%, in contrast to economist expectations of a decrease to 5.6%. Job gains were primarily driven by the leisure and hospitality sector (343,000 added), which was in line with expectations.
Other notable growth was seen in the public and private education, professional and business services and retail trade industries.
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Key Jobs Report Figures
- Nonfarm payroll growth accelerates with 850,000 jobs added
- Private payroll growth accelerates with 662,000 jobs added
- Unemployment levels rose 10 points from May to 5.9%
- Labor force participation rate unchanged at 61.6%
- The total number of unemployed people is up 200,000 since May to 9.5 million
- Revised May nonfarm payroll employment increased by 24,000 to 583,000
- Unemployment and the number of unemployed people are still far off pre-pandemic levels from February 2020 of 3.5% and 5.7 million
Takeaways from the June Jobs Report: The U.S. economy is undeniably still on a path to recovery. The increase in the number of jobs added and the unemployment rate shows more people looked to head to work in June than in May.
Wage growth has also extended prior increases, with June showing 10 cents of growth in average hourly earnings. As Bank of America economist Michele Meyer put it, “wage growth should remain robust in June as labor supply fails to keep up with strong labor demand.”
With more states advancing reopening plans, the need for in-person workers in service and retail areas will increase. As federal unemployment insurance benefits begin to expire across the country and vaccination levels increase going into the fall, we should see a more considerable increase in the number of people actively seeking jobs, and higher-risk service job openings could begin to fill, potentially easing wage growth pressure.
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