US job growth is set to pick up in June as the world’s largest economy continues to recover from the Covid-19 shock and hiring catches up with relentless demand for workers.
According to a consensus forecast prepared by Bloomberg, employers across the country are expected to add 720,000 jobs in June, up from 559,000 gains recorded in May, which fell short of expectations. The unemployment rate is also expected to fall, to 5.6 percent, from 5.8 percent a month earlier.
The data, to be released Friday by the Bureau of Labor Statistics at 8:30 a.m. eastern daylight, comes at a critical time for the U.S. economy.
Easing lockdown measures and generous government stimulus programs have led to a strong recovery in economic growth this year. In turn, US consumer prices have risen as supply chain constraints have hampered some companies’ ability to meet scalding consumer demand.
Crippling labor shortages have also crippled employers as childcare restrictions and fears of catching Covid keep people from returning to the workforce. Some companies blame unemployment benefits for the job recovery, prompting several Republican-leaning US states to cut aid.
Companies have started raising wages and handing out perks to attract new employees. Friday’s report will show whether those measures help to balance labor market mismatches.
Economists polled by Bloomberg predict that the employment rate, which tracks the number of Americans who are employed or seeking a job, will remain stable around its current level of 61.6 percent. Average hourly wages will meanwhile rise by 0.3 percent from the previous month, representing an increase of 3.6 percent year-on-year.
Despite the expected increases in June, employment in the US remains far from pre-pandemic levels. In May, 9.3 million people were still unemployed, compared to 5.7 million in February 2020.
A strong jobs report will bolster the view put forward by a cohort of US central bankers that the Federal Reserve should begin to consider withdrawing its monetary policy support as it approaches “significant further progress” toward an average inflation rate of 2 percent. percent and achieving employment. That has long been the threshold for any adjustment to the Fed’s $120 billion monthly asset purchase program.
Fed Chair Jay Powell and other members of the Federal Open Market Committee have instead urged patience — a message they tried to push last month after the release of the dot plot of the Federal Reserve’s individual interest rate projections. who may have a more aggressive stance than many expected.
Latest corona news
Follow The Washington City Times’s live coverage and analysis of the global pandemic and rapidly evolving economic crisis here.