More Jobs but Still Too Few Workers

As politicians like to do, President Biden is taking credit for the 850,000 net new jobs that the Labor Department said Friday were added in June. “None of this happened by accident,” he said. “It’s a direct result of the American Rescue Plan.”

He’s right it’s not an accident. It’s the result of the economy reopening in more states, but the jobs recovery would be faster without the $1.9 trillion spending bill Democrats passed this spring.

The top-line number beat most estimates with private employers adding 662,000 jobs. A big bump was to be expected after states lifted almost all of their business restrictions. Vaccines last month were widely available, and people exhausted by lockdowns have been eager to go out. Reservations on OpenTable in many states are higher than the same time in 2019.

Most jobs added last month were in industries that reopened, especially leisure and hospitality (343,000), state and local education (229,700) and retail (67,100). The household survey was more pessimistic and showed unemployment increased by 168,000, which caused the jobless rate to tick up to 5.9% from 5.8%.

While the household and establishment surveys don’t always match, last month’s disparity appears to be due in part to the huge increase in part-time work (408,000) and decline in reported self-employment (183,000). These differences tend to re-align over time.

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