Global stock markets moved higher across the board following positive US jobs data, with Wall Street stocks hitting new records.
Beating economists' expectations, 850,000 non-farm jobs were added to the US labor picture last month in a sign that recovery is indeed underway with the biggest gain in 10 months. That followed a gain of 583,000 jobs in May and 269,000 in April.
Continuing from the past few months, job gains in June were most significant in leisure and hospitality, public and private education, professional and business services, retail trade, and other services.
As states across the country lifted restrictions on businesses and (vaccinated) customers are returning to normal, additional summer vacation travel and service sector employers are the biggest contributor to the monthly payrolls increase.
Still down by 2.2 million, or 13% from last February, leisure and hospitality employment increased by 343,000 last month, with half of it coming from the food industry.
Also lower than the pre-pandemic level, employment in public and private education increased by 155,000. Retail trade added 67,000 jobs, which represented a 2% drop from February 2020.
Other major industries, such as information, financial activities, and health care, employment showed little change month-on-month.
We’re not out of the woods yet, though. “Both the unemployment rate, at 5.9 percent, and the number of unemployed persons, at 9.5 million, were little changed in June,” noted BLM.
The new unemployment rate is suggesting that people who lost their jobs during the pandemic still aren't rejoining the labor force as quickly as hoped.
Among the unemployed, the number of job leavers—those unemployed persons who quit or voluntarily left their previous job and began looking for new employment—increased by 164,000 to 942,000 in June.
The number of persons on temporary layoff (at 1.8 million) and the number of permanent job losers (at 3.2 million) was largely unchanged and still 5.1 million higher than in February 2020
Employers are still competing to recruit workers, leading to a slight pay increase.
The average hourly pay of private-sector employees rose 3.6% in June from a year earlier. Compared with February 2020—the month before the pandemic plunged the U.S. into a recession—average hourly earnings are up 6.6%,
However, the pay increase is slightly lower than expected. That may be partly explained by the predominance of leisure and hospitality in net job gains, considering the sector's high share of low-paid work.
The Labor Department’s report also showed that discrepancies in unemployment by race have not improved.
Among major ethnic groups, the unemployment rates for Whites (5.2 percent), African Americans (9.2 percent), Asians (5.8 percent), and Hispanics (7.4 percent) showed little or no change in June.