JULY 6, 2021 – HIRING REBOUNDS SIGNIFICANTLY IN JUNE
The US economy added 850,00 new jobs in June, the biggest employment gain in 10 months. Workers’ wages rose by 3.6 percent from a year earlier. The unemployment rate in June was 5.9 percent, up from 5.8 percent in May; this is not bad news, but rather due to workers re-entering the workforce and expanding the labor pool.
Job growth has not been as good as the gains in the general economy over the last months, but now the labor market seems to be playing catch-up. April data showed 269,000 new jobs, followed by 583,000 in May. As the national vaccination rate rises, restrictions on businesses are coming down; as well, the ending of unemployment benefits is driving people back to work.
The job market gains indicate the economy is in a true recovery, which should cause the Fed to take notice. The job numbers will not prompt a short-term rise in rates, but the Fed will need to address how soon they should reduce their $120 billion in monthly bond purchases. The Fed officials have been split as to the size and the timing.