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U.S. job gains surge, easing pressure on Biden over labor market

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U.S. job gains surge, easing pressure on Biden over labor market

The U.S. economy added 850,000 jobs in June, a strong showing after two disappointing months of employment growth that had sparked criticism from Republicans that the Biden administration was stifling a labor market revival.

The report from the Labor Department marked a significant improvement over May’s 583,000 net job gain and beat Wall Street expectations of about 700,000. The unemployment rate was little changed at 5.9 percent.

“Things are picking up. All that employer demand is turning into jobs and higher wages for many workers,” wrote Nick Bunker, economic research director for the job-listing platform Indeed. “This pace of progress is solid and it looks like things can get even better.”

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The report is likely to ease some pressure on President Joe Biden over the labor market’s slower-than-expected recovery. The GOP has hammered Biden over generous federal jobless benefits, which governors and lawmakers say are among the reasons workers have been reluctant to reenter the market.

At the same time, the number is probably not robust enough to change the view of Federal Reserve Chair Jerome Powell that the economy continues to require emergency assistance in the form of rock-bottom interest rates until the labor market heals even further.

Both Biden and Powell have largely staked their futures on the argument that rising inflation will prove only temporary and that even more federal spending and easy money policies are needed to help address structural problems holding back the economy.

“Some further substantial improvement, which is a standard the Federal Reserve is looking at, is proving a little harder to come by,” said Mark Hamrick senior economic analyst for financial services company Bankrate. With “labor force participation basically flat, no improvement in the unemployment rate, I think that it’s not unreasonable to say we’d like to be doing better.”

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The leisure and hospitality industry, which has complained of a labor shortage, saw the largest gains, adding 343,000 jobs last month, according to the report. Overall, wages grew 0.3 percent from the previous month, in line with expectations, and are now up 3.6 percent from this time last year. That figure may need to rise even more to get more workers off the sidelines.

While the June jobs figure would be considered outstanding during normal economic times, it is still nowhere near the kind of growth needed to quickly restore the jobs that remain missing since Covid slammed the U.S. in the spring of 2020. The U.S. is still about 7 million jobs short of February 2020 levels.

“Americans are going back to work in large numbers, but this is no time to let up,” said Labor Secretary Marty Walsh. “We are still down millions of jobs from pre-pandemic levels and the inequities heightened by the crisis persist. We need to be proactive in our policies to create good jobs and make sure all workers have access to those jobs.”

Analysts suggest the economy would be adding well over a million jobs per month right now if employers could find all the workers they want.

Biden touted the June numbers as evidence that his economic policies are working.

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“Our recovery is helping us flip the script. Instead of workers competing with each other for jobs that are scarce, employers are competing with each other to attract workers,” he said after the release. “That kind of competition in the market doesn’t just give workers more ability to earn higher wages, it also gives them the power to demand and be treated with dignity and respect in the workplace.”

Below the top-line numbers, other key indicators of the labor market’s health showed some improvement over the previous month but still suggest that the economic recovery is uneven by industry, gender and race.

Unemployment among women and Black Americans, who made up a disproportionate share of the jobs lost to the pandemic because of the lockdowns’ hit to service-sector jobs, ticked up in June after both groups added more workers.

The labor force participation rate, which measures how many people are currently working or actively seeking work, didn’t budge, though the overall labor force did increase by 151,000. However, participation among Black workers did rise to 61.6 last month from 60.9 in May.

Republicans have blamed enhanced pandemic unemployment benefits for keeping Americans from going back to work. Federal programs offer an extra $ 300 a week to the jobless and broadly extend eligibility to most laid-off workers.

So far, 26 states, nearly all GOP-led, have opted to end their participation in the federal programs weeks before the September expiration date, although the effect of those moves barely showed up in the June report. Lawsuits against those actions have been filed in Maryland, Texas and Indiana.

A state court in Indiana issued a preliminary injunction last week requiring the state to continue paying out the benefits until it fully considers the case.

Still, the number of workers filing new claims for unemployment benefits has been steadily falling in recent weeks, according to data from the Labor Department, and economists have found no real sign that ending the benefits spurred a surge in employment.

However, the job growth did not appear to be strong enough in June to pull those who have been unemployed the longest off the sidelines.

The number of long-term unemployed, or workers who have been jobless for more than six months, increased by 233,000 to 4 million last month, after falling in May.

Author: Ben White and Rebecca Rainey
Read more here >>> Politics, Policy, Political News Top Stories

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U.S. job gains surge, easing pressure on Biden over labor market
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