Jobs report shows unemployment holds at 3.6 percent in June – The Washington Post

Congress reacts to jobs report along partisan lines
Biden boasts of historic jobs recovery, but voters worry about inflation
Hiring rose across industries, including hospitals, restaurants and day cares
Gas prices falling in line with oil-price plunge
Stocks dip as investors assess employment picture
This labor market does not look like a recession
Wage growth is leveling off
Factory employment tops pre-pandemic level for first time
Strong jobs numbers will keep pressure on Fed to raise interest rates
Rising inflation is making homelessness worse, even for those with jobs
How is this data calculated — and how accurate is it?
Unemployment rate remains at pandemic low of 3.6 percent
Labor market remains red-hot amid growing recession fears
Investors zero in on oil prices for economic warning signs
Looking back at the May jobs report
Congress reacts to jobs report along partisan lines
Biden boasts of historic jobs recovery, but voters worry about inflation
Hiring rose across industries, including hospitals, restaurants and day cares
Gas prices falling in line with oil-price plunge
Stocks dip as investors assess employment picture
This labor market does not look like a recession
Wage growth is leveling off
Factory employment tops pre-pandemic level for first time
Strong jobs numbers will keep pressure on Fed to raise interest rates
Rising inflation is making homelessness worse, even for those with jobs
How is this data calculated — and how accurate is it?
Unemployment rate remains at pandemic low of 3.6 percent
Labor market remains red-hot amid growing recession fears
Investors zero in on oil prices for economic warning signs
Looking back at the May jobs report
A new federal jobs report released Friday showed the U.S. labor market maintained its torrid pace in June, even as the Federal Reserve raised interest rates and worries of a hiring slowdown or a possible recession grew.
But with inflation spiking and other indicators more mixed, the new data leaves a confusing picture of what, exactly, the economy is doing and what policymakers, businesses and consumers should do to prepare for the future.
Employers added 372,000 new positions last month, the Bureau of Labor Statistics reported, with gains across a range of industries and private-sector employment recovering all of its pandemic losses. The unemployment rate, meanwhile, remained steady at 3.6 percent for a fourth straight month.
“The U.S. labor market is defying gravity,” said Becky Frankiewicz, chief commercial officer for the staffing firm Manpower Group. “Fears of a possible recession stoked by inflation and an aggressive Fed are eclipsed by the simple reality that employers can’t hire fast enough to meet demand.”
The strong job growth keeps pressure on the Fed to continue raising interest rates when it meets later this month. After years of keeping interest rates at or near zero, the central bank has so far hiked rates three times this year, by a total of 1.5 percentage points, in the hope of slowing the economy just enough to curb inflation, which is at 40-year highs, without pushing it into a deep recession.
Fears of a more serious slowdown in the world’s largest economy are rising, despite the impressive job gains. Consumer confidence has plunged to record lows, in part because inflation is so high, and the stock market has lost trillions of dollars worth of value this year. (The stock market was mixed on Friday.)
Recession-spotters have pointed to technology industry layoffs, falling commodity prices and real-time measures of economic performance that showed output shrinking as proof that the United States was mired in its second downturn in three years.
The Federal Reserve Bank of Atlanta, for instance, estimated that the economy shrank by 1.2 percent in the second quarter, which would technically put the United States in a recession by one common definition, since the first quarter also saw a contraction.
But the National Bureau of Economic Research, the nonprofit organization that is the official arbiter of recessions, considers a number of other factors, such as the unemployment rate, before proclaiming a downturn is underway.
“The labor market continues to tighten,” said Eric Winograd, director of developed market economic research for Alliance Bernstein in New York. “Unless or until that changes, the economy will not be in recession, no matter what GDP prints say.”
President Biden on Friday took credit for the rapid labor market turnaround, saying it was the result of widespread stimulus efforts to revive the economy. The recovery from the brief pandemic recession in early 2020 has been much faster than the recovery from the Great Recession after the 2008 financial crisis.
“Today, we learned that our private sector has recovered all of the jobs lost during the pandemic, and added jobs on top of that,” Biden said in a statement on Friday. “This has been the fastest and strongest jobs recovery in American history.”
U.S. employers are still eager to bring on new workers. Businesses continued to hire briskly in June, with some of the biggest jumps in professional and business services, which added 74,000 jobs, leisure and hospitality at 67,000 jobs and health care at 57,000 jobs.
Employers added 29,000 new factory jobs in June, bringing the total to 12.8 million, which means all of the nearly 1.4 million manufacturing jobs lost in the early months of the pandemic have been recovered. There were also notable gains in jobs producing durable goods, such as computers and motor vehicles, and in food manufacturing.
Overall, the economy is still down about 500,000 jobs from before the pandemic. Although private-sector employers have more than made up for pandemic losses, the government is still down 664,000 employees from early 2020.
“These are big, broadly distributed gains,” said Julia Pollak, a labor economist at Zip Recruiter. “There was continued strength in even the most capital-intensive and interest rate-sensitive sectors like manufacturing and construction, which suggests that the labor market is still vibrant and dynamic. It is not reacting too negatively to the return to more normal interest rates.”
What is a recession? We answered all your economy questions here.
Employment also rose across retail, transportation and warehousing, and education. Day-care centers added 11,000 workers, while nursing and residential care facilities hired 8,000 workers, promising developments that could help get more parents and caregivers back into the labor force.
“We saw strong gains in child care, which has an immediate impact on getting people back to work,” Labor Secretary Marty Walsh said in an interview. “If you have people who can’t go to work because they don’t have strong child care, and all of a sudden, centers start calling parents saying, ‘We have an opening, our wait list is moving,’ that’ll have an impact on getting people, especially more women, back to work because frankly, the jobs are available.”
In Ohio, spirits manufacturer Cleveland Whiskey recently hired two new employees, bringing its head count to 18. Despite rising costs and other economic challenges, chief executive Tom Lix says sales have largely held up so far this year.
“There has been a little bit of a flattening from last year, but consumer demand remains pretty strong,” he said. “There are a lot of factors we’re dealing with, inflation, supply shortages in terms of getting bottles and grains and everything else, but nothing obvious that says, ‘Oh my God, demand is down.’ It is still too early to tell which way things are going, but we’re keeping a very close eye on it.”
The share of people with jobs or actively looking for one fell slightly in June, to 62.2 percent of the labor force, from 62.3 percent the month before. But workers continue to reap the benefits of a tight labor market where there are nearly two open positions for every person seeking a job.
Around 4.3 million Americans quit or changed jobs in May, a sign that workers had the upper hand. Some are switching careers altogether, from hospitality to office work, for instance, in search of more consistent hours, higher wages and better working conditions.
Wages continued to rise in just about every sector, except for manufacturing and professional and business services, where they remained steady from the month before. Average hourly earnings rose 10 cents to $32.08 in June, though there are signs that growth is cooling. Overall wages are up 5.1 percent over the past year, though they have not kept pace with prices, which have increased 8.6 percent in the same period.
“Wage growth has been fairly strong, and the good news is that gains have been largest for lower-income workers,” said Liz Ann Sonders, managing director and chief investment strategist at Charles Schwab.
After nearly a decade working in restaurants, Annabel Sanderson, 29, recently took a job as a teller for a bank in New Hampshire. She went through three interviews and got an offer within a week of applying. The bank is paying her more she had asked for, amounting to a 50 percent raise, along with a hefty benefits package that includes pet insurance. She said she had grown tired of working in short-staffed restaurants.
“I didn’t expect to get a job within a week, especially since I don’t have any experience in banking,” she said. “I was shocked as heck. But it just shows you that there is still a real need for employees.”
David J. Lynch contributed to this report.
Lawmakers had divided sentiments on the outlook of the economy Friday morning.
House Majority Leader Steny H. Hoyer (D-Md.) said the June statistics showed a continuing trend of growth. He cited the American Rescue Plan, which aimed to help small businesses during the pandemic, and a bipartisan infrastructure spending bill, which invested over $100 billion in infrastructure, as key laws that helped to “reinvigorate our economy and help Americans get back to work.”
“It is imperative that the House and Senate agree on a final version of a bipartisan, bicameral innovation bill similar to the America COMPETES Act that the House passed in February,” Hoyer added. The bill proposed training programs for workers in the innovation, research and manufacturing sectors. He also said the Senate could soon pass a reconciliation bill that would lower costs.
Republicans, though, raised concerns over the continuing labor shortage. “Red flags abound in the June jobs report with the worker shortage persisting, layoffs rising, and employment shrinking two of last three months, fueling inflation, empty shelves, and hurting the economy,” said Rep. Kevin Brady (R-Texas), the top Republican on the House Ways and Means Committee, in a statement.
He added that rising inflation created extra burden on small businesses and families, because they “have been wiping out their savings just to keep up with rising prices in President Biden’s cruel economy punctuated by slow growth.”
The new jobs report adds to evidence that the current labor market recovery has been dramatically faster than the one after the global financial crisis and the Great Recession.
The Biden administration has been desperate to get credit for that accomplishment — but voters fixated on surging inflation don’t seem impressed.
After the housing bubble popped in 2008, it took more than six years for the economy to claw back the roughly 8 million jobs that had been obliterated.
Labor market wreckage from the pandemic was even greater: Between February and April 2020, roughly 12 million jobs vanished.
Two years later, though, almost all of them have been recovered. And if the recent pace of hiring continues, they will all be back by September.
At the White House on Friday, President Biden narrowed his focus to just private-sector employment and claimed “mission accomplished” on the jobs front.
“Today, we learned that our private sector has recovered all of the jobs lost during the pandemic, and added jobs on top of that,” the president said in a statement. “This has been the fastest and strongest jobs recovery in American history, and it would not have been possible without the decisive action my Administration took last year to fix a broken COVID response, and pass the American Rescue Plan to get our economy back on track.”
The flip side of the labor market’s rapid healing has been the highest inflation in 40 years, according to many economists. And voter concern over those rising prices is putting at risk the president’s hopes of keeping Democrats in control of Congress this year — and hanging onto his own job in 2024.
Industries of all kinds continued to hire briskly in June, with some of the biggest jumps in professional and business services (which added 74,000 positions), leisure and hospitality (67,000) and health care (57,000).
And despite signs that consumers may be pulling back on spending, goods and services industries continued to hire at healthy levels. Employment rose in retail, as well as in transportation and warehousing and manufacturing and education.
Meanwhile, children’s day-care centers added 11,000 workers, while nursing and residential care facilities hired 8,000 — promising developments that could help get more parents and caregivers back into the labor force.
“Strong employer demand is supporting the solid jobs gains,” said Daniel Zhao, senior economist at jobs site Glassdoor. “There may be fear that the economy is slowing, but the labor market is a point of strength. … It remains healthy and does not look like a labor market on the edge of recession.”
Although many sectors have made up for pandemic losses, that isn’t the case for restaurants, hotels and other leisure and hospitality businesses. Employment there is still down by 1.3 million workers, or nearly 8 percent, from February 2020.
Gas prices continue to inch down from their June peak, with the national average for a gallon of gas dropping to $4.72 on Friday, according to AAA.
That’s a three-cent drop over yesterday’s average, and a decline of 23 cents from a month ago.
Gas prices are slowly aligning with the price of crude oil, which plunged as low as $95 per barrel last week as investors prepared for a possible recession. Crude prices have since climbed back up, reaching $105 per barrel Friday morning, but they remain substantially below earlier highs. West Texas Intermediate crude, the U.S. oil benchmark, briefly surged over $130 per barrel in the early weeks of Russia’s invasion of Ukraine.
CitiBank said in a note to investors that the price of oil could collapse to $65 per barrel by the end of the year if a demand-crippling recession hits, according to Bloomberg.
Stocks dropped in early trading Friday as investors processed stronger-than-expected jobs data.
Dow Jones industrial average was trading down 120 points, or 0.4 percent shortly after the Labor Department reported that 372,000 jobs were created in June, leaving the nation’s unemployment rate unchanged at 3.6 percent. The S&P 500 index was off 0.7 percent while the tech-heavy Nasdaq shed 1.1 percent.
The declines come on the heels of a four-day winning streak, which has pushed the Dow up a modest 1.9 percent. Markets have been getting pummeled this year as investors grappled with soaring inflation, rising interest rates, geopolitical turmoil, the pandemic and other concerns
The strong labor market is seen as a last bastion against a possible recession and has been a motivating factor behind the Federal Reserve’s aggressive rate-hike campaign. The central bank has bumped up its benchmark interest rate three times in 2022 and signaled that four more increases are on the way. The most recent hike, in June, came in at three-quarters of a percentage point, the Fed’s largest since 1994.
An economy that added 372,000 jobs in 30 days sure does not seem like one that is already in a recession — as some politicians and commentators have recently claimed.
Recession-spotters have pointed to tech industry layoffs, falling commodity prices and real-time measures of economic performance that showed output shrinking as proof that the United States was mired in its second downturn in three years.
The Federal Reserve Bank of Atlanta’s GDPNow economic model, for example, says the economy shrank by 1.9 percent in the second quarter.
If true, that would mark the second consecutive quarter of falling output, an oft-cited recession indicator.
Yet the National Bureau of Economic Research, the private nonprofit organization that officially calls the tops and bottoms of business cycles, requires declines in a broad array of economic data before proclaiming a recession is underway.
Typically, the first month of a recession shows the economy shedding jobs, according to Jim Reid, a managing director at Deutsche Bank.
“This clearly hasn’t happened yet,” Reid wrote in a client note.
Indeed, the economy created a monthly average of 375,000 jobs in the second quarter. That’s down from an average of 539,000 in the first quarter. But both figures are too hot to sustain over time.
In contrast, jobs gains averaged 164,000 per month in 2019, the last year before the pandemic changed everything.
“The labor market continues to tighten. Unless/until that changes, the economy will not be in recession, no matter what GDP prints say,” said Eric Winograd, director of developed market economic research for AllianceBernstein in New York.
Workers continued to see higher wages in June, though there are signs that growth is cooling — and pay isn’t keeping up with inflation, so people may not feel like they’re making more.
Average hourly earnings rose 10 cents to $32.08 last month. That’s a 5.1 percent year-over-year increase, down from 5.2 percent in May, which helps assuage fears that fast wage growth will keep inflation soaring.
“Workers are no longer seeing accelerating wages, which should reduce concerns about a wage-price spiral,” Nick Bunker, economic research director at Indeed, wrote in an email. “But with inflation still high, workers are unlikely to see further gains in inflation-adjusted wages.”
Wages have grown steadily in recent months, in part because employers are so desperate to keep and attract workers in a tight labor market, but they haven’t kept pace with prices, which have increased 8.6 percent in the last year.
Last month, wages rose in just about every sector, except for manufacturing and professional and business services, where they stayed steady from the month before.
Inflation is wiping out pay increases for most Americans
“Wage growth has been fairly strong, and the good news is that gains have been largest for lower-income workers,” said Liz Ann Sonders, managing director and chief investment strategist at Charles Schwab. “The rub, of course, is that inflation is higher than even the highest wage gains, so real growth is negative.”
The economy has finally recovered all of the nearly 1.4 million manufacturing jobs that were lost during the first months of the pandemic in 2020.
Employers added 29,000 new factory jobs in June, bringing the total to 12,797,000, the Bureau of Labor Statistics said Friday. On the eve of the pandemic, manufacturing employment stood at 12,785,000.
Notable gains last month included jobs producing durable goods, such as computers and motor vehicles, and in food manufacturing.
The Biden administration has cited recent examples of U.S. companies “reshoring” some factory work as evidence that its efforts to encourage domestic manufacturing are paying off.
This week, the White House said new investments in semiconductor production in Phoenix and steel and aluminum plants in Kentucky and Arkansas were “part of a larger trend of businesses looking to reassess their supply chains and move production closer to home.”
Still, as the Federal Reserve raises interest rates to cool inflationary pressures, there are signs that factory hiring is slowing. The average monthly increase over the past two months was less than half the 60,000 manufacturing jobs added in March and April.
And, of course, manufacturing employment remains almost 7 million jobs below the 1979 peak.
The job market posted another month of stellar growth, with 372,000 new positions, keeping the unemployment rate at 3.6 percent for the fourth straight month, new Labor Department data show.
The strong reading, including further wage growth, keeps the pressure on the Federal Reserve to continue raising interest rates.
“The U.S. labor market is defying gravity,” Becky Frankiewicz, chief commercial officer of ManpowerGroup, said in an email. “Fears of a possible recession stoked by inflation and an aggressive Fed are eclipsed by the simple reality that employers can’t hire fast enough to meet demand.”
The central bank has so far hiked rates three times in hopes of slowing the economy. But today’s report shows that the labor market isn’t cooling much yet, and it may deflect fears of a recession despite red flags in other parts of the economy.
“The employment report does nothing to dissuade Federal Reserve officials from sticking to their interest rate raising plans,” Mark Hamrick, senior economic analyst at Bankrate, said in an email. “Those fearing a recession don’t find supporting evidence for one that’s imminent in this data.”
The sheriffs arrived at 6 a.m. in early June to tell Josanne English what she already knew: She was being evicted.
She’d lost her job as a project manager near Sacramento in April, then fell behind on rent as $6-a-gallon gas and higher costs for food and utilities depleted her monthly budget. By the time she lost her home two months later, she owed $9,160 in rent and late fees, and her bank account was nearing zero.
“I made good money — last year I made almost $100,000 — and I can’t believe this happened to me,” she said. “But with prices the way they are, it can literally happen to anybody.”
Rising housing costs, combined with persistent inflation for basic necessities such as gas and food, have left more Americans newly homeless and millions more fearing they’ll soon lose their homes. Shelters across the country are reporting a sudden increase in numbers of people looking for help as they struggle to cover basics. Inflation has reached 40-year highs just as many vulnerable families are readjusting to life without a boost from government stimulus or protections to keep them from being evicted.
A rise in homelessness is the latest example of a recovery further separating the haves from the have-nots. In the past, homelessness has often befallen those going through hard times after losing a job, shouldering unexpected medical expenses or dealing with ongoing health problems. However, this time around, shelters say they’re seeing a rise in families who still have steady, even well-paying, jobs but cannot find a home they can afford.
The numbers being released today offer a snapshot of how many jobs were added last month based on surveys of households and businesses.
But as more data flows in, the figures are often revised in future months’ releases.
The updated estimates, the Labor Department says, provide a “more complete and therefore more accurate picture of developments in the job market.”
Pre-pandemic, estimates were revised by an average of 30,000 jobs, or 0.02 percent of all the jobs in the United States, according to a Washington Post analysis. Recent revisions to the jobs reports, though, have been much larger: Last summer, for example, initial reports underestimated job growth by a total of 626,000 over four months — more than 150,000 per month, on average.
The government dramatically underestimated job growth in 2021
Angie Clinton, the Bureau of Labor Statistics section chief who oversees the payroll number crunching, told The Post last year there have been more large revisions since the start of the coronavirus pandemic, but that revisions are a sign the system is working as intended.
“We’re just improving the estimate using everything we know up through the month we’re releasing, really,” Clinton said. “I mean, it sounds counterintuitive to most people because revisions — they think, ‘Oh, they got it wrong the first time.’ But no, we got it right, based on what the sample told us.”
Monthly employment figures are calculated using two surveys by the BLS. The first, a household poll, measures unemployment, while the second survey culls data from 697,000 establishments, including major employers, government agencies and small businesses, to measures employment, hours and earnings by industry.
Job growth remained strong even as it continued to slow in June, with U.S. employers adding 372,000 new positions, according to a new Labor Department report released this morning.
The unemployment rate remained unchanged at 3.6 percent.
“The labor market is still running hot even though the temperature has come down by a few degrees,” said Daniel Zhao, senior economist at Glassdoor. “We did see recession concerns pick up significantly in June, but labor demand seems to be holding up.”
The latest figures underscore the strength of a labor market that has rapidly rebounded after more than 20 million people lost their jobs in the first months of the pandemic. But after months of unprecedented growth and decades-high inflation, the focus has shifted to cooling the economy enough to a more even-keeled pace.
“What we see in the last few months of data are a strong labor market and also one that’s beginning to make the transition from historic economic recovery to steady, stable growth,” a senior White House official said in a Thursday media briefing ahead of the unemployment report.
“There continue to be a range of risks to the economic outlook… including inflation and disruptions associated with the war in Ukraine,” added the official, who spoke on the condition of anonymity as part of ground rules set by the White House. “But the strong labor market … we continue to see is an important tail wind in the face of those risks.”
U.S. employers showed they were eager to hire in May, adding fuel to a red-hot labor market that’s served as a bulwark against growing recession fears.
Employers posted 11.3 million job openings that month, down from a peak of 11.8 million in March and 11.4 million in April but still well above pre-pandemic levels, according to a report released Wednesday by the Bureau of Labor Statistics.
Roughly 4.3 million Americans quit or changed jobs in May, reflecting a job market where workers continue to have the upper hand. Overall hiring slowed slightly, with businesses adding 6.5 million workers in May, compared with 6.6 million the month before. Layoffs, meanwhile, remained near record lows.
“This is not what a recession looks like,” said Nick Bunker, an economist at the jobs site Indeed. “Demand for workers might be stagnating, but it’s still at very elevated levels. The labor market is not signaling a recession.”
Hiring remains healthy despite mounting signs of economic gloom. Inflation — which has lifted the price of gas, groceries and goods — is near 40-year highs. Consumer sentiment is at an all-time low. And more economists and forecasters are predicting a recession within the next year.
Falling oil prices rattled investors this week and bonds flashed signs of a coming recession, suggesting that U.S. consumers could face more economic upheaval.
The surging cost of commodities has been a major driver of rising inflation, with the gas pump perhaps been the most frequent reminder of that squeeze for many Americans. While the price of fuel has pulled back from its June peak — the national average stood at $4.72 on Friday, according to AAA — further declines might not be of much consolation to consumers because they could run into an economic downturn that puts further pressure on stocks and could spill into the labor market.
More concerning to analysts is that oil prices are falling because of grim economic projections, serving as sort of a canary in the coal mine for declining economic activity across the board. On Tuesday, oil prices fell moved below $100 a barrel for the first time since May. By Friday, though, prices were back about the centennial mark.

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