The recovery of the US labor market is gaining momentum after a spring lull.
Employers 850,000 jobs added in June – the biggest gain in 10 months – and workers’ wages rose rapidly, the government said on Friday, both signs of strong demand for workers.
The unemployment rate, derived from a separate household survey, rose to 5.9% last month from 5.8% in May. This was in part because of a positive development: a modest number of Americans stepped off the sidelines and entered the job search, thereby expanding the labor pool. A broader measure of unemployment that takes into account workers stuck in part-time jobs and those too discouraged to look for work fell sharply last month.
Job growth lagged behind broader economic growth earlier this spring, with the economy creating 583,000 jobs in May and 269,000 in April. But big obstacles to hiring are starting to disappear. Rising vaccination rates, the easing of government restrictions on businesses and the expiration of unemployment benefits in many states are fueling the latest growth.
Workers are returning to the workforce – albeit slowly – and employers, desperate to hire to serve a flood of clients, are dangling higher wages and other incentives such as signing bonuses. Hourly wages of private sector workers increased 3.6% from the previous year.