The June jobs report came in better than expected with 850K new jobs being added to the economy, the strongest gain since last August. This beat expectations of 720K and May’s revised figure of 583K and comes after a string of disappointing job reports across April and May. Leisure and hospitality were the areas with the best gains. Average hourly earnings rose 0.3%, while hospitality wages grew 1.0% as employers offered higher wages and bonuses to fill empty roles. However, average hours works declined, pointing to some downside risk in an otherwise bullish report. Overall, the June report puts the economy still short roughly 6.8M jobs versus the pre-pandemic peak.
With the June jobs data, the unemployment rate ticked up to 5.9%, from 5.8% in May, despite a stall in the participation rate, which remains nearly 2 p.p. below pre-pandemic levels (61.6% current vs 63.4% in January 2020).
Other positive news on the labor front included improving initial jobless claims. The latest weeks figures came in well below 400K, at 364K, which was welcome news after the improving trend here stalled out for most of June.