United States: Labor market conditions improve slightly in June
Total non-farm payrolls increased by 850,000 in June, a solid reading that beat analysts’ expectations of a 700,000 increase. This followed May’s 583,000 increase in payrolls. Employment gains occurred in leisure and hospitality, public and private education, and in professional and business services.
That said, the unemployment rate ticked up to 5.9% in June from 5.8% in May, and the labor force participation rate was virtually stable at 61.6%. Hourly earnings rose 0.3% month-on-month in June (May: +0.4% mom), while annual wage growth accelerated to 3.6% from 1.9%. Taken together, June’s reading suggests the economy continues to recovery robustly as the pandemic dissipates and stimulus feeds demand, although there is still some way to go to recover all the jobs lost last year.
On the reading and outlook, Katherine Judge, a senior economist at CIBC Economics, noted:
“Although today’s report showed that growth in aggregate hours worked accelerated to 4.5% annualized in Q2, up from 3.2% annualized in Q1, yesterday’s miss on construction spending for May suggests that GDP growth in Q2 could be closer to 9% annualized rather than the previous 10% we had projected.”