U.S. added 850,000 jobs in June as labor market showed renewed strength

The U.S. economy added 850,000 jobs in June as the pace of the recovery surged—quieting simmering fears, at least temporarily, of more lasting harm from labor and supply shortages.

The unemployment rate changed little, ticking up to 5.9% from 5.8%.

The news is likely to be seen as a good sign for the economy more than one year into the pandemic, after numerous wrinkles have emerged to complicate a labor recovery many hoped would be faster at this level of vaccinations.

Job growth in April and May, while not anemic, fell well below the hopes that more than one million jobs could be added per month in the spring. Economists surveyed by Dow Jones expected about 700,000 jobs to be added in June, as the economy continues to chip into the deficit of 7.5 million less jobs that country has filled than before the pandemic.

Material shortages and bottlenecks have plagued sectors like manufacturing as well—helping to drive up prices and complicate the recovery as consumer demand and activity rebounds. And inflation remains a concern of top policymakers in Washington, after more than a year of low interest rates and stimulus measures have helped fire up the economy.

Economists continue to look to the leisure and hospitality sector—still down more than a million jobs from before the pandemic—for signs of a reawakening jobs market, as caseloads remain low and vaccination rates continue to crawl upwards.

Air travel has climbed significantly in recent months and the Fourth of July weekend is expected to continue the trend. According to an estimate by AAA, travel for the holiday is expected to increase by 40 percent compared to last year and nearly reach pre-pandemic levels, with an estimated 47.7 people traveling.

Consumer spending, on services like restaurants, entertainment and transportation has been increasing in recent months.

A temporary $300-a-week federal unemployment benefit, on top of regular state jobless aid, has been enabling some people to be more selective in looking for and taking jobs. Almost half the states were scheduled to stop paying the supplement by the end of June in what proponents say is an effort to nudge more of the unemployed to seek jobs.

Indiana planned to stop the $300 benefit on June 19 but that move was blocked by a Marion County judge. The state is appealing the ruling.

On Thursday, the government reported that the number of people who applied for jobless aid last week fell to 364,000, the lowest level since the pandemic began.

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