June 2021 Jobs Report Is Anticipated to Present an Uptick in Hiring

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The latest clues on the state of the country’s economic recovery will come on Friday morning when the Department of Labor releases its June job report.

Economists expect wage increases to top 700,000, up from the 559,000 announced for May. Analysts polled by MarketWatch predict that the unemployment rate will fall from 5.8 percent to 5.6 percent.

The report tracks several promising economic developments this week. Consumer confidence, which rose in June, is at its highest level since the pandemic began last year. Stocks ended the first half of the year with record highs and companies’ investment plans are rising. The Congressional budget bureau said Thursday that the economy was well on its way to reclaiming all jobs lost in the pandemic by the middle of next year. And both the Budget Office and the International Monetary Fund forecast US economic growth of or close to 7 percent for the current year, the largest increase since 1984.

Still, Sarah House, Senior Economist at Wells Fargo, stated, “This is a difficult period of recovery.” Last year, millions of workers were laid off temporarily and were able to return to their previous positions with little delay after the reopening began.

Now employers and employees need to “make new matches and new connections, and that just takes more time,” she said.

Economists also point to widespread redistribution of workforce – such as mammoth-scale music chair rounds – in which workers reassess their options. During the pandemic, many workers who had worked in restaurants and retail stores may have held positions in warehouses and manufacturing facilities.

At the same time, appetite for pandemic-related jobs such as couriers and grocers is waning as other sectors such as leisure and hospitality expand.

“There are more job vacancies today than before the pandemic and fewer workers,” said Becky Frankiewicz, president of recruitment agency ManpowerGroup North America.

“The key challenge now is to get workers back into the workforce,” she said.

Governors in 26 states have stopped distributing unemployment benefits related to a federal pandemic, despite funding through September, arguing that the support – including a $ 300 weekly allowance – kept people from returning to work .

The June numbers do not reflect the cutoff impact on recruitment, as the Department of Labor’s business and household surveys were conducted in the week ending June 12, before the states ceased federal benefits.

However, recruiters have not seen an increase in job search or hiring in states that have since withdrawn from federal programs. “I would have expected that after the end of federal funding, more people would be more gainfully employed,” said Frankiewicz. “We haven’t seen this correlation yet.”

Indeed, the online job board, interviewed 5,000 employed and inactive people and found that childcare responsibilities, health concerns, vaccination rates, and a financial cushion – through savings or public support – had all impacted the number of job seekers. While many employers are desperately looking for new hires, only 10 percent of employees surveyed said they are urgently looking for a job.

And even in this group, 20 percent said they did not want to take a position immediately.

Analysts expect the biggest wage increases to come in the leisure and hospitality sectors, which were also hardest hit during the pandemic.

They also warned that the Department of Labor’s estimates could be affected by seasonal adjustments. For example, the number of teachers usually drops sharply when schools are closed in the summer. However, accounting for this traditional decline can be made difficult by the fact that the pandemic-related school closings have prevented as many educators from working.