ADP: Employers Added 692,000 Jobs in June

Job growth has been uneven this year, as employers struggle with a record amount of openings and a shortage of available help, as applicants are hesitant to return to the workforce amid continuing health concerns, difficulty finding child care and an unwillingness to work for the wages being offered.

That is forcing companies to raise wages and offer hiring incentives, which in turn leads to higher prices, which, so far, consumers are paying. In addition to the oft-cited reasons for the tight labor market, some observers point to two other factors: the sharp increase in retirements of baby boomers amid the pandemic and the past few years of policies designed to curb immigration.

"In addition, we have a two-year drop in American life expectancy, 1 million excess deaths, and 3.5 million long-haul COVID disabled," says David Kotok, chairman and chief investment officer at Cumberland Advisors. "Is it any wonder why labor costs are rising and there are not enough people to fill the job openings."

"We expect continued growth in labor force income," Kotok adds. "That income will become spending. The country is short 10 million people of working age and inclination. Unless politicians who made policy over the last few years alter their views (not likely), tight labor markets and rising labor costs are destined to continue."

A quarterly survey of economists by Bankrate released Wednesday found they expect job gains over the next 12 months to average 412,000 a month, roughly twice what it takes to keep employment level but short of the amount to recover the 22 million jobs lost during the pandemic. Roughly two-thirds of those jobs have been recouped, but not all demographics and income groups have seen improvement.