Post-vaccine rebound accelerates as US economy adds 850,000 jobs
Joe Biden hails ‘historic progress’ and credits stimulus package
Number in or seeking work still 3m below pre-pandemic peak
Last modified on Fri 2 Jul 2021 14.05 EDT
The US added 850,000 jobs in June, a sign that the country’s post-vaccine rebound is continuing to accelerate.
The national unemployment rate remained relatively stable, rising 0.1% to 5.9% in June, probably because more people came off the sidelines to join the labor force.
The figures were better than expected. Predictions ahead of the latest release estimated that 700,000 jobs would be added in June, 150,000 jobs below the number that was released on Friday by the Bureau of Labor Statistics.
At a press conference Joe Biden said Friday’s report was “something else to celebrate” and said the $1.9tn stimulus package he signed in March aided the recovery.
“This is historic progress, pulling our economy out of the worst crisis in a hundred years,” Biden said.
The uptick in jobs exceeded estimates for the first time since the Covid-19 vaccine began to be widely distributed in the US. April was a particularly dour month in comparison, with the country adding 266,000 new jobs that month – far below the 1m expected. New jobs doubled in May, jumping to 559,000, but still fell below expectations.
As a majority of states have fully lifted their coronavirus social distancing and masking restrictions, more Americans are traveling and eating out. A bulk of the jobs that were added in June came from the leisure and hospitality sector, with nearly 200,000 jobs added to food and drink services. Private and public education jobs as well as employment in the retail industry also increased in June.
The growth in jobs was also reflected in the low number of unemployment insurance claims that were filed at the end of June – 364,000 claims, a decrease of 51,000 from the week before, and the lowest level since 14 March 2020, around the time when many states implemented their coronavirus lockdowns.
But while the numbers beat expectations some economists appeared hesitant to fully celebrate June’s job numbers, as the latest rise still leaves the number of people in work or looking for a job 3m below the peak preceding the pandemic.
Many businesses have started offering increased wages and hefty signing bonuses in an attempt to entice new employees to work. One Burger King in Pennsylvania put a sign on its storefront advertising a $1,500 bonus to new hires. Average hourly earnings rose 3.6% compared with last June, reflecting the higher pay some employers are offering to employees.
Some businesses have turned to teenagers looking for summer jobs, offering them daily bonuses for showing up on time.
Economists point to a number of factors that are making it harder for businesses to find employees, including workers wanting to be more selective in their job hunt or who do not have access to childcare.
A debate over whether enhanced unemployment benefits are encouraging workers to stay home instead of work has intensified over the last few months as businesses report labor shortages. Some states, nearly all run by Republican governors, cut off access in June to an additional $300 a week the federal government is giving to those unemployed. Other states have plans to end the additional benefit in July and August, before the federal government is set to end the additional benefit 6 September.
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