employment rebounded more than expected in June

Washington (awp / dpa) – The US economy created more jobs than expected in June, “a historic step forward,” Joe Biden said, even though the job market is far from recovered from the pandemic and unemployment continues to hit black and Hispanic communities hard.

“Our economy is making historic progress, coming out of the worst crisis in a hundred years”, which is “a direct consequence” of the White House’s revival policy, assured the Democratic president at a press conference.

“It is clear that we are on the right track,” he added, welcoming that the growth forecasts for 2021 have been revised upwards by the Congressional budget staff and the IMF.

In total, 850,000 jobs were created against 680,000 expected by a consensus of analysts, the labor department announced on Friday.

It’s better than in May (559,000) but there is still 6.8 million jobs missing compared to February 2020, just before the start of the pandemic in the United States which plunged the world’s largest economy into recession as the rest of the globe.

In addition, the unemployment rate rose to 5.9% (+0.1 points) last month with the number of people unemployed unchanged (9.5 million).

And, blacks and Hispanics are still the hardest hit with an unemployment rate of 9.2% and 7.4% respectively against 5.2% for whites and 5.8% for Asians.

“These data are significantly down from their April 2020 highs but remain well above their pre-coronavirus pandemic levels,” the ministry noted in a statement, recalling that in February 2020, the Unemployment rate was 3.5% – its lowest level in 50 years – and 5.7 million people were out of work.

“There is a shortage of 6.8 million jobs (…). 5 million services are still missing, so this is where the focus will be in the future,” said economist Joseph Brusuelas of RSM. on Twitter.

The ministry’s figures only give a fragmentary view since the data is only collected for the first half of the month.

Unsurprisingly, “notable” job gains have taken place in the leisure and hospitality sectors which have suffered the most from COVID-related restrictions.

An effective vaccination campaign has made it possible to reopen at full speed many restaurants, amusement parks, cinemas, etc. And, with Americans whose savings swelled during the pandemic, with millions of households receiving government assistance, demand for the services has soared.

Myriad of obstacles to employment ___

The public and private education sector has also recruited strongly with the prospect of the reopening of establishments at the next school year after having remained closed for more than a year for some.

Economists had expected a strong jobs report, with some predicting as much as a million new jobs.

But the job market is still faced with a myriad of difficulties: the mismatch between jobs and the profiles of the unemployed, the problem of childcare or the fear of Covid which is still present.

Some unemployed people have other professional aspirations and are not ready to accept any offer while some employees quit because they do not want to return to the office and are looking for a telecommuting job.

Faced with the sharp increase in activity, particularly in restaurants, employers are increasing the number of offers accompanied by substantial bonuses to motivate candidates.

Republicans blame very generous unemployment benefits since the start of the pandemic, which allows some low-skilled unemployed to earn more than when they held low-paid jobs.

Republican states have thus started to anticipate the withdrawal of these allowances which should take place in early September, but their real impact will only appear in the data for July.

“Overall, this report signals gradual progress in the pace of job growth,” summarized Ian Shepherdson, chief economist at Pantheon Macroeconomics.

On Thursday, the International Monetary Fund said that the growth of the US economy is expected to reach 7% this year, the fastest pace since 1984.

afp/rp

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