US added 850,000 jobs in June – but unemployment RISES from 5.8% to 5.9%

The US added 850,000 jobs in June but unemployment rose from 5.8 percent to 5.9 percent, the Labor Department revealed Friday.

The increase in Americans on nonfarm payrolls beat expectations of a rise of 706,000, but the unemployment rate was expected to fall to 5.7 percent.

Hiring has been accelerated as the country returns to normal and more people get vaccinated, but there are still concerns of labor shortages across the country.

Politicians, businesses and some economists have blamed enhanced unemployment benefits, including a $300 weekly check from the government, for the labor crunch. 

Lack of affordable child care and fears of contracting COVID have also been blamed for keeping workers, mostly women, at home.

The jobless rate has been understated by people misclassifying themselves as being ’employed but absent from work.’ 

The labor force participation rate was unchanged at 61.6 per cent. 

Dow futures rose on the news, and President Joe Biden was scheduled to speak on the new data Friday morning. 

There are a record 9.3 million job openings. Economists polled by Reuters had forecast payrolls advancing by 700,000 jobs last month and the unemployment rate dipping to 5.7 percent.

The US added 850,000 jobs in June but unemployment rose from 5.8 percent to 5.9 percent, the Labor Department revealed Friday. Joe and Jill Biden are pictured arriving at the White House after their trip to the collapsed Miami condo on Thursday

Average hourly earnings rose 0.3% last month after increasing 0.4% in May. That raised the year-on-year increase in wages to 3.6% from 1.9% in May. Annual wage growth was in part flattened by so-called base effects following a big drop last June.

The report suggested the economy closed the second quarter with strong growth momentum, following a reopening made possible by vaccinations against COVID-19. More than 150 million people are fully immunized, leading to pandemic-related restrictions on businesses and mask mandates being lifted.

Some economists are now projecting economic growth will extend as high as 10 per cent in the second quarter, a figure well above historical norms for the U.S. economy.

But as in prior monthly reports, there are data points that are cause for concern even as the economy rebounds.

The number of long-term unemployed ticked up to 4 million in June, an increase of 233,000, a figure about 3 million higher than it was in February 2020 before the pandemic hit. That followed a decline of 431,000 in May. 

Manufacturing jobs are still down nearly 500,000 from pre-pandemic levels. 

Some of the biggest gains have been in the hospitality industry hard-hit by the pandemic.

It gained 340,000 jobs amid an industry hiring spree boosted by vaccinations, reopenings, and the resumption of travel. The figure includes 194,000 job gains in bars and restaurants – even as the overall employment in the sector lagged pre-pandemic levels by more than 2 million jobs.   

There have also been pandemic-related retirements as well as career changes. Economists generally expect the labor supply squeeze to ease in the fall as schools reopen and the government-funded unemployment benefits lapse but caution many unemployed will probably never return to work.

Record-high stock prices and surging home values have also encouraged early retirements.

According to job search engine Indeed, 4.1 percent of jobs postings advertised hiring incentives through the seven days ending June 18, more than double the 1.8 percent share in the week ending July 1, 2020. 

The incentives, which included signing bonuses, retention bonuses or one-time cash payments on being hired, ranged from as low as $100 to as high as $30,000 in the month ended June 18.

Some restaurant jobs are paying as much as $27 per hour plus tips, according to postings on, a national job board for the restaurant/hospitality industry. 

The federal minimum wage is $7.25 per hour, but is higher in some states.

With employment not expected to return to its pre-pandemic level until sometime in 2022, rising wages are unlikely to worry Federal Reserve officials even as inflation is heating up because of supply constraints. Fed Chair Jerome Powell has repeatedly stated he expects high inflation will be transitory.

The U.S. central bank last month opened talks on how to end its crisis-era massive bond-buying.

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