Reflecting the gradual reopening of the economy, the Labor Department released a report on Friday showing a continued reacceleration in the pace of U.S. job growth in the month of June.
The report showed non-farm payroll employment spiked by 850,000 jobs in June after surging by an upwardly revised 583,000 jobs in May.
Economists had expected employment to jump by about 700,000 jobs compared to the addition of 559,000 jobs originally reported for the previous month.
Following the decrease in employment seen last December, the pace of job growth has bounced back to its highest level since last August.
The stronger than expected job growth was partly due to significant increases in employment in leisure and hospitality and public and private education, which added 343,000 jobs and 269,000 jobs, respectively.
Notable job growth was also seen in professional and business services, retail trade, and other services, the Labor Department said.
Meanwhile, the Labor Department said the unemployment rate unexpectedly inched up to 5.9 percent in June from 5.8 percent in May. The unemployment rate was expected to edge down to 5.7 percent.
The unexpected uptick in the unemployment rate came as the labor force increased by 151,000 persons, while the household measure of employment actually edged down by 18,000.
“While a combination of labor supply constraints – including the virus fear, unemployment benefits, childcare issues and early retirements – is still constraining employment these headwinds should gradually ease in the coming months,” said Lydia Boussour, Lead U.S. Economist at Oxford Economics.
She added, “Still, the return to a pre-Covid environment won’t happen overnight and we should be prepared for labor demand and labor supply to be bumpy in the second half of the year as the economy gradually returns to a new post-pandemic normal.”
The report also showed average hourly employee earnings rose $0.10 or 0.3 percent to $30.30 in June. Annual wage growth accelerated to 3.6 percent in June from 1.9 percent in May.
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