At first sight, the increase of 850,000 payroll employment in June appears to be a positive sign, since it exceeds economist predictions by over 100,000. However, a closer examination reveals that the findings are more mixed. Three industries accounted for the majority of the increase in payroll jobs: leisure/hospitality (343,000), retail (67,000), and education (67,000). (270,000). The final figure reflects the number of kids who have returned to school. Despite the large increase in Leisure/Hospitality positions, the industry is still almost 2 million jobs short of what it was in early 2020, and employees remain wary of accepting or staying in the primarily low-wage professions there.
On the household level, we saw little improvement in the unemployment rate (currently 5.9%), nor in labor force participation (61.6%) or employment/population ratios (58 percent ). Women’s labor force participation and employment did not increase after the huge drops they saw in 2020.
Two other household statistics stand out: 1) Job Leavers (or quitters) climbed by 164,000 to nearly 1 million; and 2) Long-Term Unemployment (6 months or more) has increased to 4 million. As a result, a big number of individuals are losing their jobs, while an even larger number will have significant difficulties reentering the labor market and obtaining new employment.
Finally, wage growth remained substantial (at 4% annualized), though not as strong as in April and May; salary growth over the last three months is at 5.7 percent annualized. This demonstrates that employers are having trouble attracting and retaining people, and that they are responding by making employment more enticing.
Overall, the June report presents a tumultuous picture. Payroll employment increased significantly, but largely in just three industries, and workers are still hesitant to take those in the leisure/hospitality sector. Employers may have trouble recruiting people when jobs have transferred to new occupations or firms, based on modest improvements in other areas. Many workers are quitting their jobs, while others remain unemployed for long periods of time. Significant salary increases continue to pose difficulties for firms in attracting and retaining employees. Even when their children have returned to school, women continue to be unemployed.
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