U.S. job growth is on the rise in June; the unemployment rate rises to 5.9% according to Reuters

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job growth accelerated in June as companies were disappointed by rising demand for production and services, rising wages and provided incentives for millions of reluctant unemployed Americans to return to the world of work.

Non-farm payrolls rose 850,000 jobs last month after rising 583,000 in May, the Labor Department saw closely on Friday in its employment report. The unemployment rate rose to 5.9% from 5.8% in May.

He said the unemployment rate is “employed but unemployed” when people misclassify themselves. There are a record 9.3 million job offers. Economists surveyed by Reuters predicted that payrolls would rise by 700,000 jobs last month and the unemployment rate would fall to 5.7%.

Average hourly earnings rose 0.3% last month after rising 0.4% in May. This led to a 3.6% year-on-year increase in wages from 1.9% in May. The increase in annual wages was, in part, flattering from the so-called basic effects following the sharp drop last June.

The report suggested that the economy closed the second quarter with strong growth, after vaccines against COVID-19 allowed it to reopen. More than 150 million people are fully integrated, leading to restrictions on pandemic-related businesses and the removal of mask orders.

Politicians, businesses and some economists have blamed better unemployment benefits, including a $ 300 weekly check on the government, as a result of the labor crisis. The lack of affordable childcare and fears of infecting the coronavirus have also been blamed on staff, mostly women, for keeping them at home.

There have also been pandemic-related retirements and career changes. Economists generally expect job cuts to reopen schools in the fall and government-funded unemployment benefits to expire but beware that many unemployed are unlikely to return to work.

High stock prices and high home values ​​have also driven early retirements.

According to job search engines, in fact, 4.1% of jobs announced hiring incentives in seven days ending on June 18, more than double the 1.8% share in the week ending July 1, 2020. Incentives, including signing bonuses, withholding bonuses, or single cash payments when hiring, were $ 100 and $ 30,000 in the month ended June 18.

Some restaurant jobs pay $ 27 an hour and add tips, according to Poachedjobs.com, a national restaurant / hospitality job board. The federal minimum wage is $ 7.25 an hour, but in some states it is higher.

As employment does not return to pre-pandemic levels until 2022, wage increases are unlikely to worry Federal Reserve officials, even as inflation is heating up due to supply constraints. Fed Chairman Jerome Powell has repeatedly stated that he expects high inflation to be transient.

The U.S. central bank opened last month on how to end the massive buyout of crisis bonds.