Employers added to payrolls last month, a positive sign for the nation’s economic recovery; but the labor market continues to struggle with low levels of workforce participation.
The June jobs report released this morning showed that employers added 850,000 positions to payroll last month. Economists expected to see gains closer to 700,000. The hospitality and leisure sector, which was hit particularly hard by the pandemic, accounted for roughly 40 percent of this growth, adding 343,000 jobs to payrolls. While these gains are welcome news for the country’s economic recovery, current job levels remain 6.8 million below the pre-pandemic economy. In the first months of the pandemic, the U.S. lost 22 million jobs. Close to 70 percent of these jobs have been recovered.
While strong payroll growth is good news, data on the U.S. workforce paints a different picture. The percent of U.S. adults participating in the workforce remained unchanged from May at 61.6 percent, down from 63.3 percent prior to the pandemic. This metric, called the labor force participation rate, includes individuals with jobs as well as those without a job but actively looking for one. In total, the U.S. labor force grew by 151,000.
The unemployment rate also remained largely unchanged from May, sitting at 5.9 percent in June compared to 5.8 in May. About 9.5 million individuals throughout the country are unemployed, meaning they do have paid employment but are seeking it. The percentage of the adult population with paid work, known as the employment-population ratio, was flat as well compared to May, at 58 percent. The employment-population ratio is 3.1 percentage points below pre-pandemic levels.
The labor market data reflects rising concerns and frustrations from employers trying to find workers. A monthly survey by the National Federation of Independent Businesses has shown almost 50 percent of small businesses unable to fill open positions, almost double a 50-year average of 22 percent.
The monthly jobs report includes the results of two surveys conducted by the U.S. Census Bureau and Bureau of Labor Statistics (BLS): the household survey, which looks at the labor force, and the establishment survey, which looks at employment and payroll. While BLS presents the results of these surveys together in the monthly report, it is important to remember that the two surveys are very different from one another and use different concepts and definitions. As a result, job data and labor data do not always align and tell the same story.
“Discrepancies between the results of the two surveys that make up the monthly jobs report are not uncommon. The differences in the June report, however, are striking,” said Kentucky Chamber Senior Policy Analyst Charles Aull. “Observers should remember to focus on trends and continue to pay close attention to what they are hearing directly from employers, workers, and job seekers.”
See below for additional highlights from the June jobs report.
- Wages continue to increase at higher-than-usual rates, following a trend from this past Spring.
- The length of the average workweek declined slightly following slight increases in previous months.
- The percentage of workers working remotely continues to decline.
- The number of individuals reporting they are unable to work because of the pandemic continues to decline.
Access the full report here.
State-level jobs and labor market data for June will be released later in the month. For more information on Kentucky’s economic recovery, read the Chamber’s most recent quarterly economic update, produced in partnership with the University of Kentucky.
Be the first to comment on "Job growth rises while the labor market remains tight"