After several tepid months of recovery, the U.S. job market is charging into summer. The
economy added 850,000 jobs, the most in 10 months, and average wages continued to rise. At
the same time, the unemployment rate ticked up from 5.8% to 5.9% as more workers came
back to the labor force looking for jobs. While vaccination rates have slowed, a majority of
eligible Americans are fully vaccinated, and over 64% have received at least one dose. In the
coming months, job growth should continue as more COVID-related restrictions on businesses
are lifted, schools and daycares fully reopen, and extra unemployment benefits expire. We’re breaking it all down this month in JobGet’s June unemployment update!
The Labor Department’s strong June jobs report follows a lackluster spring. The economy
added more jobs than predicted, and average hourly wages continued their upward trend. A
large share of the added jobs belongs to the Leisure and Hospitality sector. While the overall
labor force participation rate stayed the same, the labor force participation rate among
prime-age adults (aged 25 to 54) increased to the highest level since before the pandemic.
The slight uptick in the unemployment rate is partly due to an increased number of workers
stepping off the sidelines and back into job searching. The rise in the rate could also be caused
by more technical reasons—such as the difference in data sources between the unemployment
rate and the jobs numbers.
Both temporary layoffs and permanent job losses were unchanged since last month, but the
number of unemployed individuals increased by 200,000 from May. Both more workers coming
back to the workforce and the increase in the number of unemployed voluntary job leavers are
fueling this increase. The number of newly unemployed (less than 5 weeks) fell, but the number
of long-term unemployed (6 months or more) workers rose. The number of long-term
unemployed fell in April and May after climbing for months, but this month’s increase reverses
Several demographic groups saw increases in their unemployment rates. The unemployment
rate for teens ticked up to 9.9%, slightly higher than the 9.6% seen in May. Women’s
unemployment rate increased marginally from May, going from 5.4% to 5.5%, while men’s
unemployment rate was unchanged. Hispanics, Whites, and African Americans all experienced slight rises in their unemployment rates from last month, while the unemployment rate for Asians stayed
Several occupations that experienced large job losses during the pandemic experienced slight
increases in their unemployment rates from May, but their numbers are much improved from a
year ago. The unemployment rate among service occupations is 10.8 percentage points down
from last June, currently clocking in at 7.9%. The unemployment rate for sales & office
occupations is now 6.1%, down from 11.8% last June. Natural resources, construction, and
maintenance occupations saw their unemployment rate fall to 7.1%, compared to 10.6% one
year ago. Transportation and materials moving occupations have also recovered well—the
unemployment rate among these occupations is 8.6%, over 6 percentage points lower than the
14.7% rate of last year.
Leisure and Hospitality again saw a sizable increase in employment this month, gaining 343,000
jobs, which account for 40% of the total jobs added. This represents a 2.4% increase in
employment for the battered sector from May, much greater than the 0.6% growth in total
nonfarm employment. Government and Healthcare and Social Assistance also saw substantial
increases. Several industries—Financial Activities and Construction—lost jobs compared to last
month. After losing jobs in May, the Retail Trade sector added 67,100 jobs in June. Employment
in the Other Services sector and Mining and Logging increased by 1% and 1.9%, respectively,
Average hourly wages increased again in May, although by a lower rate than the previous two
months. Compared to June of 2020, average hourly wages are 3.6% higher. Average hourly
wages for workers in Transportation and Warehousing went up by $0.47, an increase of 1.8%
from May. Leisure and Hospitality workers are again doing better than most—they saw their
average hourly wages go up by 1% from last month and are now 7.1% higher than a year ago.
For nonsupervisory employees in this sector, average wages are 2.3% higher than last month.
The Leisure and Hospitality sector has been raising wages to attract back workers, and the
large number of jobs added indicates that the labor shortage is easing.
As the economy added 850,000 jobs, the unemployment rate ticked up to 5.9%. This can be
partly explained by the increase of 151,000 workers in the labor force. Many workers stepped
out of the labor force during the pandemic and are now returning, lured back by better pay and
increased comfort levels due to the vaccinations.
Overall, the labor force participation rate is unchanged from last month, currently standing at
61.6%. However, among prime-age workers (aged 25 to 54), the labor force participation rate
rose to 81.7%, the highest rate since the pandemic began. This rate has trended upwards since
last November and is a promising sign of economic recovery.
In June, 942,000 people were unemployed due to voluntarily leaving their jobs, the highest level
since the pandemic began. Workers leaving their jobs without new ones lined up are confident
they can find new employment. They may be looking for better pay, benefits, or different
careers. The pandemic has served as a wake-up call for many Americans, who are
re-examining their priorities and career paths.
After limping along this Spring with lackluster jobs numbers, the U.S. job market recovery hit its
stride in June. The economy added 850,000 jobs, the most in nearly a year. Strong growth in
the Leisure and Hospitality sector indicates the labor shortage is easing. Even the slight
uptick in the unemployment rate could be a positive sign—workers are coming off the sidelines
back into the workforce. Wages continue to grow (especially for non-supervisory employees in
some sectors) as businesses try to attract workers.
The coming months should see continued employment growth as more Americans become
vaccinated, bonus unemployment benefits expire, and schools and daycares fully reopen.
JobGet is proud to help hopeful job seekers land great positions on our platform. It is important
that both candidates and employers have their needs met as we transition to a more normal
Check back next month for another unemployment update!
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