WASHINGTON: US private payrolls increased more than expected in June as companies rushed to boost production and services amid a rapidly reopening economy, though a shortage of willing workers continues to hang over the labour market recovery.
The ADP National Employment Report on Wednesday showed hiring in the leisure and hospitality sector accounting for nearly half of the increase in private payrolls this month. Manufacturing payrolls growth slowed, likely reflecting labour shortages as well as scarce raw materials. A global shortage of semiconductors is hampering production of motor vehicles and some household appliances.
Private payrolls increased by 692,000 jobs in June. Data for May was revised lower to show 886,000 jobs added instead of the initially reported 978,000. Economists polled by Reuters had forecast private payrolls would increase by 600,000 jobs.
More than 150 million Americans have been fully vaccinated against Covid-19, allowing authorities to remove pandemic-related restrictions on businesses and mask mandates for the inoculated.
Employment gains in June were evenly spread among small, medium and large companies, indicating that the economy’s recovery from the pandemic was broadening in scope.
Leisure and hospitality payrolls increased by 332,000 jobs and there were solid gains in education and health services. Factories added only 19,000 jobs, below the monthly average 43,000 jobs in the past three months. Hiring at construction sites increased by 47,000 jobs. The sector is being underpinned by strong demand for housing, thanks to historically low mortgage rates and a shift to home offices during the pandemic.
A separate report from the National Association of Realtors on Wednesday showed contracts to buy previously owned homes rebounded 8% in May. But the housing market is grappling with a severe shortages of homes for sale, which is driving up prices well beyond the reach of some first-time buyers.
Applications for loans to buy a home fell last week, the Mortgage Bankers Association said in another report. Home purchase loans were down 17.3% compared to same period last year.
According to a Reuters survey of economists, private payrolls likely increased by 600,000 jobs in June after rising 492,000 in May. With government hiring expected to have increased by about 100,000, that would lead to overall payrolls advancing by 700,000 jobs in June.
The economy created 559,000 jobs in May. A shortage of willing workers is frustrating efforts to ramp up hiring. There were a record 9.3 million job openings as of April.
About 9.3 million people are officially classified as unemployed. Job growth could, however, surprise on the upside this month. The Conference Board’s survey of consumers showed households extremely upbeat in their views of the labour market.
The survey’s so-called labour market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, surged in June to the highest level since 2000.
Comments
Comments are closed for this article.