At first glance, the rise of 850,000 payroll jobs in June is quite encouraging, since that number exceeded economist expectations by over 100,000.
But a closer look suggests that the results are a bit more mixed. The rise in payroll jobs was concentrated in three sectors: Leisure/Hospitality (343,000), Retail (67,000), and Education (270,000). The last number reflects students returning to school. Despite the big gain Leisure/Hospitality, that sector remains over 2 million jobs shy of what existed in early 2020, and workers still seem somewhat reluctant to accept or stay in the mostly low-wage jobs there.
On the household side, we saw little reduction in the unemployment rate (now 5.9%), and no improvement in labor force participation (61.6%) or employment/population (58%). In particular, labor force activity and employment did not increase for women after the large declines they experienced during 2020.
Two other household numbers stand out: 1) Job Leavers (or quits) increased by 164,000 and now total almost 1 M; and 2) those in Long-Term Unemployment (6 months or longer) are now 4 M. So a large chunk of workers are leaving jobs while an even larger chunk will face great challenges reentering the labor market and finding new work.
Finally, wage gains continued to be strong (at 4% on an annual basis), though not by as much as in April or May; wage gains over the last 3 months are at 5.7% annualized. Again, this confirms that employers are having difficulty attracting or retaining workers, and are responding somewhat by trying to make jobs more appealing.
All in all, the June report paints a somewhat mixed picture. Payroll jobs rose handsomely, but mostly in just 3 sectors, and workers remain reluctant to accept those in Leisure/Hospitality. Modest gains in other sectors suggest that employers might have some difficulty finding workers as jobs have shifted to new occupations or new businesses. Many workers are quitting their jobs while others are stuck in long-term unemployment. Significant wage increases continue to show challenges for employers in finding or keeping workers. And women continue to remain out of the workforce, even as their kids have returned to school.
