The job market heated up, as employment increased by 850,000 in June. The unemployment rate rose to 5.9%, according to the United States Bureau of Labor Statistics. This may be due to more entrants into the job market, which is a good sign of people feeling more confident that they can find a new job.
Job gains were robust in the once-beaten-down sectors, such as leisure and hospitality. Public and private education, professional and business services, retail trade and other services rose too. The number of unemployed persons—9.5 million—were little changed in June. However, it’s down considerably from their April 2020 highs.
The growth in jobs can be attributed, in part, to the millions of Americans who were vaccinated. As people received their shots, the mood of the country vastly improved. The renewed confidence led to loosening restrictions and states reopening. This emboldened people to leave their homes to go out to eat, shop, see live events and travel.
The wealth effect helped out too. The stock market has been hitting record highs. Real estate and home sales are blazingly hot. This makes people feel financially secure and comfortable to spend money, which helps stimulate the economy—thereby creating a need for more jobs.
The change was so swift and massive that businesses could not find enough workers to keep up with demand. As states set aside enhanced unemployment benefits, more people started searching for jobs. The war for talent became so hot that restaurants offered higher wages and sign-on bonuses to entice people to apply for job openings.
Here are some of the highlights from June’s jobs report:
- Among the major worker groups, the unemployment rates for adult men (5.9%), adult women (5.5%), teenagers (9.9%), whites (5.2%), Blacks (9.2%), Asians (5.8%) and Hispanics (7.4%) showed little or no change in June.
- Among the unemployed, the number of job leavers—that is, 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, was essentially unchanged over the month. This measure is down considerably from the high of 18 million in April 2020, but is 1.1 million above the February 2020 level.
- The number of permanent job losers, at 3.2 million, was also essentially unchanged over the month, but is 1.9 million higher than in February 2020.
- In June, the number of long-term unemployed (those jobless for 27 weeks or more) increased by 233,000 to 4 million, following a decline of 431,000 in May. This measure is 2.9 million higher than in February 2020. These long-term unemployed accounted for 42.1% of the total unemployed in June.
- The number of persons jobless less than 5 weeks, at 2.0 million, changed little in June.
- The participation rate is 1.7% lower than in February 2020. The employment-population ratio, at 58%, was also unchanged in June, but is up by 0.6% since December 2020. However, this measure is 3.1% below its February 2020 level.
Not everyone was enthusiastic about the jobs report. Some are pessimistic or have mixed feelings about the June jobs report. Despite the good news, the labor force participation rate was unchanged at 61.6% in June and has remained within a narrow range of 61.4% to 61.7% since June 2020. Millions of people have dropped out of the labor force. Nonetheless, job openings far exceed the number of job seekers.