The BLS Current Employment Survey for June 2021 showed a healthy 850,000 jobs, up from 583,000 in May.
This month’s gains exceeded outside forecasts by more than 150,000. For example, ADP projected 692,000 jobs, while Reuters had 700,000 (Reuters, July 2 report. The unemployment rate was largely unchanged, at 5.9%. At the same time, we need to remember that one data point does not make a trend, and the gap between current numbers and the Fed’s full employment objectives remains wide. For example, the number of unemployed was still about 9.5 million; and while the economy has added over 15.6 million jobs since April 2020, that number is still just 70% of the 22.4 million jobs lost during March and April of last year.
Furthermore, we are now well aware of the emphasis the FOMC has begun to place on the jobs situation for low-income people and minorities, who were hit especially hard by the pandemic. In this latest report, the unemployment rate for men was 5.9%, women 5.5%, whites 5.2%, whereas the unemployment rate for blacks was 9.2%, Hispanics 7.4%, and Asians 5.8%. Interestingly, despite the improvement in hiring, in each case the unemployment rate ticked up slightly from what it was in May 2021.
In terms of job gains by industry grouping, the biggest gains were in Leisure and Hospitality (343,000) as people began to eat out and travel again. Retail trade gained slightly (67,000); Professional and Business Services hiring increased 72, 000, and Government added 188,000 jobs.
While the economy is clearly on the mend, the calls, even by some FOMC participants, for consideration of a moderation in their accommodative policy are likely to weigh lightly on unsympathetic ears of those more moderate members of the FOMC at this time.
Robert Eisenbeis, Ph.D.
Vice Chairman & Chief Monetary Economist
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