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850,000 Gain Is Better Than Expected in June 2021 Jobs Report

850,000 Gain Is Better Than Expected in June 2021 Jobs Report

ECONOMIC NEWS

850,000 Gain Is Better Than Expected in June 2021 Jobs Report

Hiring leapt back up in June as employers added 850,000 workers, the government reported Friday. It was the strongest gain in 10 months and a fresh sign that the labor market’s recovery is gaining momentum.The unemployment rate rose slightly, to 5.9 percent, the Labor Department said.The report follows several promising economic developments this week. Consumer confidence, which surged in June, is at its highest point since the pandemic’s onset last year. Stocks closed out the first half of the year at record highs, and businesses’ plans for capital investments are rising. The Congressional Budget Office said Thursday that the economy was on track to recover all the jobs lost in the pandemic by the middle of next year.“I think it’s a very solid and strong report and very encouraging that we’re seeing over the last few months continued increase in the net job creation,” said Kathy Bostjancic, chief U.S. financial economist for Oxford Economics. She noted that the totals fell below the one million mark that the Federal Reserve chair, Jerome H. Powell, has said he would like to see. Still, she added, “the momentum is moving in the right direction.”At the moment, 6.8 million fewer jobs exist than before the pandemic. Millions of people have dropped out of the labor force, however, and “job openings far outnumber the applicants,” said Karen Fichuk, chief executive of the staffing company Randstad North America. “It is truly across the board right now.”Aside from ever-present concerns about pay and benefits, workers are particularly interested in jobs that allow them to work remotely at least some of the time. According to a Randstad survey of more than 1,200 people, 54 percent say they prefer a flexible work arrangement that doesn’t require them to be on-site full time.Health and safety concerns are also very much on the minds of workers whose jobs require face-to-face interactions, the survey found.“This is a trickier phase of the recovery,” said Sarah House, a senior economist with Wells Fargo. Last year, millions of workers were only temporarily laid off and able to slot back into their previous positions with little delay once reopening began.Now, employers and workers are “having to make new matches and new connections, and that just takes more time,” she said.Economists also point to a widespread reallocation of labor — like rounds of musical chairs on a mammoth scale — in which workers are re-evaluating their options. During the pandemic, many workers who had held restaurant and retail jobs may have taken positions in warehouses and manufacturing plants.At the same time, the appetite for pandemic-driven jobs such as couriers and grocery store workers are ebbing as sectors like leisure and hospitality ramp up. A big chunk of June’s gains — 343,000 — were in that sector.The education sector also showed a big pickup in hiring, although economists caution that seasonal adjustments could inflate the estimated gains. That is because there is normally a large drop in the number of teachers when schools let out for the summer. Accounting for that traditional decline may be complicated by the fact that not as many educators were working because of pandemic-related school closings.Becky Frankiewicz, president of the staffing company ManpowerGroup North America, said that with so many employers in search of workers, “the core challenge now is enticing workers back to the work force.”Governors in 26 states have moved to end distribution of federal pandemic-related jobless benefits even though they are funded until September, arguing that the assistance — including a $300 weekly supplement — was discouraging people from returning to work.In states where benefits have already been cut off, though, recruiters have not seen a pickup in job searches or hiring. “I would have expected to see more people engage at a higher rate in the work force when the federal subsidies were ended,” Ms. Frankiewicz said. “We have not seen that correlation yet.”The online job site Indeed surveyed 5,000 people in and out of the labor force and found that child care responsibilities, health concerns, vaccination rates and a financial cushion — from savings or public assistance — had all affected the number looking for work. Many employers are desperate to hire, but only 10 percent of workers surveyed said they were urgently seeking a job.And even among that group, 20 percent said they didn’t want to take a position immediately.


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