US added 850K jobs in June as companies scrambled to staff up

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The US added 850,000 jobs last month — topping economists’ expectations for 706,000 jobs added — as Americans continued to emerge from the pandemic and businesses scrambled to hire new workers, the feds said Friday.

June’s gain comes after the country added 559,000 jobs in May.

The unemployment rate ticked up to 5.9 percent in June from 5.8 percent in the month prior, according to Friday’s much-anticipated jobs report from the Bureau of Labor Statistics. That’s still far higher than the 50-year low of 3.5 percent reported in February before the pandemic gutted the economy.

Economists surveyed by Dow Jones expected to see the unemployment rate fall to 5.6 percent.

Hiring was not nearly as robust as many economists expected through the spring. The jobs report disappointed in both April and May even as job openings soared to a record 9.3 million.

Many economists have said they’re not yet concerned about the economic recovery, predicting that job gains have just been pushed off into the summer rather than the spring as initially expected.

But others have said the pandemic may have fundamentally restructured the US labor market and many of those who left work over the past 18 months don’t plan to return to their old jobs.

The new federal data follows a report Wednesday from payroll processing firm ADP that showed companies hired 692,000 workers in June.

And on Thursday, the Labor Department issued new data that showed weekly new jobless claims fell to 364,000 last week, marking a new pandemic low even as nearly 3.5 million Americans remain on traditional state unemployment benefits.

Taken together, the data offer some hope that the nationwide labor crunch is easing, at least in some sectors, and it also shows that the labor market recovery is meeting expectations of a rapid rebound early this summer.

Many business owners, Republicans and economists have blamed pandemic-boosted federal unemployment benefits for causing the labor shortage, saying that the unemployment payout keeps workers at home while businesses go understaffed.

In addition to the federal unemployment program, other reasons for the labor crunch include fear of getting COVID-19 and school closures keeping parents at home, economists say.

A handful of states have now cut unemployed people off from pandemic-boosted federal unemployment benefits, which give unemployed workers an extra $300 per week.

Alaska, Iowa, Mississippi and Missouri all ended the federal program on June 12, about three months before it is set to expire.

Another eight states ended the program on June 19.

In total, at least 25 states are looking to lure workers back into the labor market by withdrawing from the federal program.

President Biden confirmed last month that he would let the federal unemployment benefits program expire after Labor Day.

The White House has defended the extra benefits, saying that businesses should pay people more.

But many economists are growing increasingly worried about wage inflation driving prices further up. Companies have already begun raising prices, blaming higher labor and supply costs.

Chipotle, for example, has said it raised its menu prices by up to 4 percent to cover the costs of higher wages for employees. Executives from other major companies, including General Mills, Unilever and JM Smucker, have also warned recently about rising costs and inflationary pressures.

Shoppers are bearing the brunt of rising prices, with the costs of everything from apparel and cars to bacon and milk spiking.

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