The U.S. is set to add 850,000 jobs in June, better than expected

July 5, 2021: -In June, Jobs growth leaped higher as businesses looked to keep up with recovering U.S. economy very rapidly, the Labor Department reported Friday.

Nonfarm payrolls rose 850,000 for the month, compared to the Dow Jones estimate of 706,000 and much than the upwardly which is revising 583,000 in May. The unemployment rate, however, increases to 5.9% against the 5.6% expectation.

The jobless rate is rising came even though the labor force participation rate did not change at 61.6%. A different figure that accounts for discouraged workers and those holding part-time jobs for economic reasons fell sharply to 9.8%. The 0.4 percentage point declined, putting the real unemployment rate, which is lesser than 10%, for the first time since March 2020.

Markets increased on the news, with futures on the major indexes indicating modest gains on the open before the weekend holidays.

“From a market perspective, this was an all-out positive jobs report,” said Seema Shah, chief strategist at Principal Global Investors.

“The improvement reflects a slight easing of the labor supply constraints that have been holding back the jobs market in the latest months and continued momentum from the economic reopening.”

Hiring accelerated as the second quarter morphed into a summer that will see a close return to normal for Americans held captive for the last year because of the pandemic-related restrictions.

As the data keeps pointing higher, economists are looking for GDP growth in the second quarter to approach 10%, a continuation of a rebound helped by vaccines that have reduced Covid-19 case rates along with hospitalizations and deaths.

Hospitality keeps going to be the prime beneficiary of the reopening as workers returned to jobs at bars, restaurants, hotels, and the like.

The industry notched a gain of 340,000 between easing restrictions across the country. The total includes 194,000 in bars and restaurants but still left the sector 2.2 million shies from where it was in February 2020 before the pandemic began.

Other notable gains came in education, totaling 269,000 across the state, local, and private hiring, while professional and business services increased by 72,000 and retail added 67,000.

The other services industry added 56,000 jobs, including a gain of 29,000 in personal and laundry services, a subsector that has been seen as a proxy for the resumption of regular business activity. The social assistance added 32,000, while wholesale trade contributed 21,000 to the total, and mining increased by 10,000.

Manufacturing edged up 15,000 in this month, though construction lost 7,000 positions despite a sizzling housing industry where a new building has been held back by supply shortages and what had been soaring lumber prices before the recent plunge.

Amid the rise in total employment, wage gains also accelerated.

Average hourly earnings increased 0.33% for the month and 3.6% year over year, matching Dow Jones estimates.