U.S. adds jobs as economy rebounds
In an encouraging burst of hiring, America’s employers added 850,000 jobs in June, well above the average of the previous three months and a sign that companies may be having an easier time finding enough workers to fill open jobs.
Friday’s report from the Labor Department was the latest evidence that the reopening of the economy is propelling a powerful rebound from the pandemic recession. Restaurant traffic across the country is nearly back to pre-pandemic levels, and more people are shopping, traveling and attending sports and entertainment events. The number of people flying each day has regained about 80% of its pre-COVID-19 levels. And Americans’ confidence in the economic outlook has nearly fully recovered.
The report also suggested that American workers are enjoying an upper hand in the job market as companies, desperate to staff up in a surging economy, dangle higher wages. In June, average hourly pay rose a solid 3.6% compared with a year ago — faster than the pre-pandemic annual pace. In addition, a rising proportion of newly hired workers are gaining full-time work.
“That underscores the growing bargaining power of labor,” said Joe Brusuelas, chief economist at RSM, a tax advisory firm. “There’s increasing confidence that they’re going to get better jobs at better wages as the economy expands.”
With competition for workers intensifying, especially at restaurants and tourist and entertainment venues, some employers are also offering signing and retention bonuses and more flexible hours. The proportion of job advertisements that promise a bonus has more than doubled in the past year, the employment website Indeed has found.
Friday’s report showed that the unemployment rate rose from 5.8% in May to 5.9% in June. Despite the job market’s steady gains, unemployment remains well above the 3.5% rate that prevailed before the pandemic, and the economy remains 6.8 million jobs short of its pre-pandemic level. Still, joblessness has plummeted from 14.8% in April of last year, just after the coronavirus erupted.
Hiring in June was particularly strong in a category that includes mainly restaurants, bars and hotels, which collectively absorbed the brunt of the layoffs from the recession; this category added 343,000 jobs. Governments added 188,000 positions, mostly in education. And hiring by retailers picked up, with 67,000 jobs added.
The number of advertised job openings reached 9.3 million in April, the highest number in 20 years of data, according to the latest Labor Department data.
Yet a number of factors are still limiting the availability of workers. Some people who are out of work are worried about taking a service job that would involve face-to-face contact with the public. In addition, about 1.5 million people left the workforce during the pandemic to care for children or other relatives and haven’t fully returned. And roughly 2.6 million older workers took advantage of enlarged stock portfolios and home values to retire early.