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U.S. adds 850,000 jobs in June, better than expected

Job growth leaped higher in June as businesses looked to keep up with a rapidly recovering U.S. economy, the Labor Department reported Friday.

Nonfarm payrolls increased 850,000 for the month, compared with the Dow Jones estimate of 706,000 and better than the upwardly revised 583,000 in May. The unemployment rate, however, rose to 5.9% against the 5.6% expectation.

The jobless rate increase came even though the labor force participation rate was unchanged at 61.6%. A separate figure that accounts for discouraged workers and those holding part-time jobs for economic reasons fell sharply to 9.8%, with the 0.4 percentage point decline putting the so-called real unemployment rate below 10% for the first time since March 2020.

Markets rose on the news, with futures on the major indexes indicating modest gains at the open before the holiday weekend.

Hiring accelerated as the second quarter morphed into a summer that will see a closer to return to normal for Americans held captive for the past year due to the pandemic-related restrictions.

As the data continues to point higher, economists are looking for GDP growth in the second quarter to approach 10%, a stunning continuation of a rebound helped by vaccines that have sharply reduced Covid-19 case rates along with hospitalizations and deaths.

The latest numbers bring the total job recovery from the pandemic losses to 15.6 million. More than 22.3 million Americans were laid off in March and April of 2020 amid government-imposed business restrictions, and the total employment level remains 7.13 million below where it was in February 2020.

Reference: CNBC