The US economy U.S. added 850,000 jobs in June, well over the consensus estimate of  706,000.

One fly in the ointment though, long term unemployment numbers continued to rise:

The U.S. labor market recovery is accelerating after a spring lull.

Employers added 850,000 jobs in June—the biggest gain in 10 months—and workers’ wages rose briskly, the government said Friday, both signs of robust demand for workers.

The unemployment rate, derived from a separate survey of households, rose to 5.9% last month from 5.8% in May. That was in part because of a positive development: A modest number of Americans came off the sidelines and entered the job search, expanding the labor pool. A broader measure of unemployment that takes into account workers stuck in part-time jobs and those too discouraged to look for work fell sharply last month.

Job growth lagged behind broader economic growth earlier this spring, with the economy adding 583,000 jobs in May and 269,000 in April. But big hurdles to hiring are starting to clear away. Rising vaccination rates, easing government restrictions on businesses and the expiration of unemployment benefits in many states are stoking the latest growth.

That last phrase is a bit of editorializing by the writer.  There is still no evidence that extended unemployment benefits are keeping people off of the job markets, but it’s dogma at places like the WSJ.

We are still not over the hump.

Initial Unemployment Claims rose by 37,000 to 412,000, though the 4-week moving average continued its downward trajectory:

Worker filings for initial unemployment benefits rose last week for the first time since late April but remained near a pandemic low as the labor market continues to heal from the impact of Covid-19.

Initial jobless claims rose by 37,000 to 412,000 in the week ended June 12. Despite the increase, the four-week moving average, which smooths out week-to-week volatility, reached a new pandemic low of 395,000. This was the lowest average level since March 2020, when the pandemic first took hold in the U.S. 

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Thursday’s claims report also showed unemployment rolls shrank late last month. The number of ongoing benefit claims—a proxy for those receiving payments—fell by more than 500,000 to 14.8 million the week ended May 29. That includes those tapping benefits through pandemic-specific programs introduced last year, including those for self-employed workers.

I wonder how much all the news about ‘Phant governors terminating benefits might be behind the drop in ongoing claims.

The stimulus from extended employment benefits are tapering off, and this will adversely effect the recovery.

The only question is how much this will effect the recovery.

Job growth in May was less than the consensus forecast, 559,000 as versus the consensus prediction of 671,000.

We are in a recovery, one just wonders how fast, and when the benefits will start accruing to the top 1% again.

I would note that the progress of the recovery illustrates an important point:  A world wide pandemic is less capable of doing lasting damage to our society than does business of usual in global finance:

U.S. employers boosted hiring in May, but not enough for the labor market to keep pace with an overall economy that is heating up as the pandemic continues to ease.

Payrolls grew by 559,000 last month, the Labor Department reported Friday, up from a revised 278,000 in April, which marked a sharp drop from March’s figure. The unemployment rate fell to 5.8% in May from 6.1% the prior month.

While the gains marked an uptick from April, they were lower than economists predicted and reflected businesses struggling to fill job openings as potential workers remained on the sidelines. The labor recovery has slowed from earlier in the year—in March, the economy added 785,000 jobs—a development economists say could delay a full labor recovery to well into next year.

That mixed picture cheered investors, who bet the numbers weren’t strong enough to change the Federal Reserve’s course on its easy-money policies. U.S. stocks rose, while the yield on the U.S. 10-year Treasury fell.

Why yes, the stock market is COMPLETELY disconnected from the well being of society, why are you asking? 

We need to stop coddling Wall Street at the expense of Main Street.

Initial claims have fallen to a new post pandemic low of 406,000.

Better news, but not exactly good news until the number falls below 300K:

Worker filings for jobless benefits fell again to a fresh pandemic low, extending a steady downward trend and adding to signs of a healing labor market and a broader, though uneven, economic recovery.

Initial unemployment claims for regular state programs, a proxy for layoffs, fell last week to 406,000 from 444,000 the prior week, the Labor Department said Thursday. That level represents the lowest levels of claims since the coronavirus pandemic’s onset last year and the fourth consecutive week claims have reached a new pandemic low. Economists surveyed by The Wall Street Journal had forecast there were 425,000 new claims last week.

A separate report from the Commerce Department showed orders for cars, appliances and other long-lasting, or “durable,” goods fell a seasonally adjusted 1.3% in April from March—the first monthly decline in demand for such products in a year. The decline was concentrated in the automotive sector, where a semiconductor shortage has caused disruptions, and the defense industry, which tends to be very volatile. Shipments of motor vehicles and parts fell sharply as well, while shipments of defense capital goods rose.

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U.S. gross domestic product, a broad measure of the economy’s output of goods and services, rose in the first quarter at an annual rate of 6.4%, unrevised from the initial estimate, according to another Commerce Department report. Consumer spending, the economy’s key driver, was revised up to an annual rate of 11.3% in the first three months of the year.

It’s clear that the first quarter numbers, while quite good, are not sustainable.  It’s a rebound from the economic contraction of the past year.

I would expect GDP growth numbers to return to trend, around 2½%.

They were expecting a million new jobs in April. They got just 266,000, and the unemployment rate ticked up by 1%.

After some good news yesterday, we got some bad news today:

Hiring in the U.S. unexpectedly slowed in April, a sign the nation’s recovery from the pandemic still faces challenges as many businesses struggle to find workers or remain cautious about the economic outlook.

U.S. employers added a modest 266,000 jobs in April, a report Friday by the Labor Department showed, far short of the one million that economists had forecast and the weakest monthly gain since January. The deceleration came after payrolls rose a downwardly revised 770,000 in March and left total employment down by 8.2 million from its pre-pandemic level.

The unemployment rate ticked up to 6.1% in April from 6% a month earlier, partially reflecting an increase in people entering the workforce.

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Signs of labor-market tightness also emerged in Friday’s report, aligning with many companies’ complaints that they can’t find workers to meet demand. Wages for workers rose in April as some employers appeared to lift pay to attract or retain employees. Average hourly earnings for private-sector employees rose by 21 cents to $30.17 in April. The gain is notable because strong hiring in the lower-wage hospitality sector—which occurred in April—would typically put downward pressure on average earnings.

Given that the hospitality sector is one of the most dangerous sectors from a Covid perspective, people are simply no longer willing to die for minimum wage, and this is a good thing. ™

The average workweek increased to 35 hours in April, an indication some employers added worker hours to compensate for the lack of labor.

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Friday’s report adds to the likelihood that the Federal Reserve’s easy-money policies will remain in place in coming months, something financial markets reflected in price movements on Friday.

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The leisure and hospitality sector, including restaurants, accounted for the bulk of employment creation in April, adding 331,000 jobs. The Labor Department said that reflected an easing of pandemic-related restrictions in many parts of the country.

Meaning that other sectors of the economy lost 60,000 jobs.   

When you undershoot your prediction by 74%, and the previous month’s jobs report was revised down by 146,000, you are not having a good jobs report.

Initial jobless claims fell below 500,000 last week, the first time that this has happened since the pandemic:

Worker filings for unemployment benefits in the U.S. reached a new low since the Covid-19 pandemic began more than a year ago—the latest sign that the labor-market rebound is gathering force.

Jobless claims, a proxy for layoffs, fell 92,000 last week to 498,000, the Labor Department said Thursday. That brings the four-week average of initial claims, which smooths out volatility in weekly data, to the lowest point since the pandemic took hold, though still well above pre-pandemic levels.

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While the number of new applications has been declining, the level of Americans receiving unemployment benefits remains elevated and businesses can’t find enough people to hire. 

I will note again, “Unable to find enough people to hire,” means, “Unwilling to pay enough for the job.”

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This improvement will likely be captured in the Labor Department’s April employment report, which the department will release Friday. Economists forecast that the U.S. economy added one million jobs last month, compared with a gain of 916,000 in March, and project that the jobless rate ticked down to 5.8% from 6% a month earlier.

However, the pandemic’s impact was so severe that economists expect employment to close out this year 1.6% lower than in the fourth quarter of 2019, despite the swift pace of hiring they anticipate in coming months. The number of new jobless claims peaked at more than six million in the spring of 2020. After falling sharply, it then plateaued between 700,000 and 900,000 throughout the fall and winter.

I’ll go with the under, because I always go with the under.

Still, this is undeniably good news.

Initial jobless claims have finally fallen below their pre-pandemic record.

Well, that only took 13 months: 

Unemployment claims declined to the lowest level since the coronavirus pandemic struck last spring, adding to signs the U.S. economic revival is picking up speed.

Jobless claims, a proxy for layoffs, fell to 576,000 last week from 769,000 a week earlier. That is the lowest weekly figure since March 2020. Claims remain higher than the pre-pandemic levels of around 220,000, but economists expect they will continue to drop as the recovery accelerates.

“We are seeing both a strong reopening and rehiring in the economy at this time,” said Kathy Bostjancic, economist at Oxford Economics. “It’s been faster than most economists expected.”

Several factors are converging to boost growth across the economy. Vaccination rates are powering consumer spending, governments are relaxing restrictions on businesses, and federal-stimulus funds are flowing through the economy.

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The total number of people receiving unemployment assistance is declining as the labor market heals. About 16.9 million people were collecting unemployment benefits through state and federal programs in the week ended March 27, down from 18.2 million a week earlier.
More on the Economy

The labor market still has a long way to go before achieving a full recovery. As of March, U.S. payrolls remained 8.4 million below their level in February 2020.

It’s unalloyed good news though the current situation remains pretty dire.

There were 916,000 added to non-farm payrolls in March, which is a very good performance, though not anywhere near close to what it was during the before time. (See graph pr0n)

Note that NFP is still down over 8 million from its peak, and the employment-population ratio is lower than it has been since the depths of the 1981 recession, and that the percentage of women in the workforce has risen steadily since that time, so an apples to apples comparison (correcting for women in the workforce and an aging population) might still have us back to somewhere in the great depression.

We’re still in a hole, but it is not as deep:

U.S. hiring surged in March as the economic recovery accelerated, the start of what economists say could be a sustained run of job growth to industries, regions and workers hardest hit during the pandemic.

U.S. employers added a seasonally adjusted 916,000 jobs in March, the best gain since August, the Labor Department said Friday, and the unemployment rate, determined by a separate survey, fell to 6.0%, a pandemic low. Still, as of March, there are 8.4 million fewer jobs than in February 2020 before the pandemic hit.

The jobs rebound is gaining renewed momentum as more people are vaccinated against Covid-19, states lift restrictions on business activity, and consumers grow more comfortable dining, shopping and traveling outside their homes.

Note also that Covid numbers are spiking again, so we may see a reversal. 

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Friday’s report showed hiring rose in most industries, led by a gain of 280,000 in the category that includes restaurants and hotels. Employment also rose sharply in construction, most manufacturing sectors and public and private schools. Temporary help and auto manufacturing, where a semiconductor shortage has idled assembly plants, were weak spots.

So a lot of the growth was in lo wage jobs.

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Some economists project job growth will top one million in April. Further out, economists surveyed by The Wall Street Journal project employers will add an average of 514,000 jobs each month over the next year, for a total of more than six million. That would mark the best 12-month stretch of job creation in decades but leave overall employment totals below where they stood before the pandemic.

I’ll always be a pessimist, which comes from the fact that the “experts” have consistently given an excessively rosy assessment of economic outcomes of recessions throughout my entire adult life. 

The levels of inequality in our society will weigh down any recovery.

There were 684,000 initial claims, less than the pre-pandemic peak of 695,000.

Yes, this is unmitigated good news:

Jobless claims fell to their lowest level of the pandemic last week as stronger hiring and consumer spending drive a U.S. economic revival.

Worker filings for unemployment benefits, a proxy for layoffs, fell to 684,000 last week from 781,000 a week earlier. Claims are now at the lowest point since mid-March of last year, before lockdowns triggered millions of layoffs. They are also below the pre-pandemic high of 695,000, a threshold not crossed for 52 weeks.

“The recovery is really hitting full steam again, and all of the conditions will be in place for a real, explosive liftoff in the summer when hopefully we’ve reached a higher vaccination threshold,” said Julia Pollak, labor economist at jobs site ZipRecruiter.

………

Economists surveyed by The Wall Street Journal this month raised their average forecast for 2021 economic growth to 5.95%, measured from the fourth quarter of last year to the same period this year, from a 4.87% projection in February’s survey. The higher figure would mark the fastest such pace in nearly four decades, following a steep downturn last year.

If these predictions are accurate, this is a blistering pace of economic growth.