U.S added 850,000 jobs in June as economy rebounds

The U.S. employment growth improved as businesses increase production and services amid robust demand, to keep up with a fast-recovering U.S. economy.

Nonfarm payrolls climbed by 850,000 last month after increasing by 583,000 in May, said the Labor Department in employment report released on Friday. The unemployment rate increased to 5.9 % in June, up from 5.8 % in May.

The employment growth rate was the highest since August of last year, exceeding analysts' expectations. Despite the recent increases, the country still has 6.8 million fewer jobs than in February 2020, when the pandemic shut down most of the economy.

Last month, the industries that added the most jobs were leisure and hospitality, such as restaurants and bars, retailers, and government positions, including education jobs.

The industry gained 340,000 jobs as regulations were relaxed across the country. This includes 194,000 in bars and restaurants. Education gained 269,000 jobs across the state, municipal, and private while professional and business services added 72,000. Retail gained 67,000, CNBC stated.

Other service industries increased 56,000 jobs, with personal and laundry services adding 29,000 positions. Social aid rose by 32,000, whereas wholesale commerce expanded by 21,000 and mining grew by 10,000.

Employers have been boosting pay to entice people to return to the labor market. Last month, workers' average hourly earnings increased by 3.6 % over the previous year.

More employees have gotten the Covid-19 vaccination; increased unemployment benefits in several states have finished or will cease by early September, and businesses have raised pay and offered to sign bonuses to get workers to return. According to the Labor Department, the number of workers asking for unemployment benefits—a proxy for layoffs—fell by 51,000 last week to 364,000, a record low.

The Federal Reserve is keeping an eye on wage growth, the unemployment rate, and other indicators to assess when and how rapidly it should reduce its stimulus measures. The report on Friday may have an impact on how swiftly it proceeds.