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June Adds 850K Jobs, But Unemployment Rate Went Up and Labor Participation Didn’t Budge

June Adds 850K Jobs, But Unemployment Rate Went Up and Labor Participation Didn’t Budge

No one is returning to work as the economy opens up. It’s great we have more jobs, but it means nothing if no one applies and hired.

I see people celebrating the June jobs report because the economy added 850,000 jobs in June.

Let’s start off with the good news. Employments rose mostly in the leisure and hospitality industries. David Lombardo, general manager of Massachusetts venue Lambardo’s, had to lay off 140 of 148 employees in 2020.

Now Lombardo’s has a long list of events, which means employment! The company hired 40 people so far this year and still needs at least 20 more.

Lombardo’s needs 20 more employees. That number brings us to the numbers buried in other reports: unemployment rate and labor participation rate.

It’s great the economy continues to open, but no one is going back to work.

I know numbers are not sexy, but you have to look at all the details to fully understand the jobs report.

The unemployment rate went up to 5.9% from 5.8%. The long-term unemployed account for 42.1% of the unemployed total in June.

The rates among major worker groups saw little change:

  • Adult men: 5.9%
  • Adult women: 5.5%
  • Teenagers: 9.9%
  • Whites: 5.2%
  • Blacks: 9.2%
  • Asians: 5.8%
  • Hispanics: 7.4%

Job leavers (those who leave their job and look for another job) increased by 164,000 to 942,000.

The long-termed unemployed number (without a job for at least 27 weeks) went up by 233,000 to 4 million in June. It went down by 431,000 in May.

Then there’s the labor force participation rate. We have 850,000 new jobs. People have to be aching to get back to work, right?

Well, it changed little in June at 61.6%. Let’s dive into those numbers (their emphasis):

In June, the number of persons not in the labor force who currently want a job was 6.4 million, little changed over the month but up by 1.4 million since February 2020. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job. (See table A-1.)

Among those not in the labor force who currently want a job, the number of persons marginally attached to the labor force, at 1.8 million, changed little in June but is up by 393,000 since February 2020. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 617,000 in June, essentially unchanged from the previous month but 216,000 higher than in February 2020. (See Summary table A.)

People living on government handouts realize they can make just as much money staying home have no reason to go back to work. Companies have willingly upped the hourly pay to lure them back to work:

Sung Won Sohn, an economist at Western Alliance Bancorporation, said demand is rising as consumers, flush with cash from wage growth and government aid programs, are boosting spending on services they put off last year. But supply—mainly, workers—isn’t keeping up.

“Employment gains would be much greater if not for labor shortages,” Mr. Sohn said. He thinks those shortages will persist beyond this summer, and perhaps in the medium- and long-term. Mr. Sohn thinks it could take another year or so for the labor market to fully recover from the pandemic.

The average hourly earnings went up by 10 cents to $30.40 in June. April and May saw increases as well.

Others have more demands:

Other workers, with new leverage in a tighter labor market, are demanding not just higher wages but also more worker-friendly conditions, such as the ability to work from home more often, or in cities outside their companies’ home bases. He thinks those factors are already pushing up wages and will persist in the long run—which, while beneficial for many individual workers, could ultimately restrain economic growth. “One of the biggest issues the economy will face is the churning and turmoil in the labor market,” Mr. Sohn said.


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2smartforlibs | July 2, 2021 at 10:21 am

Several states are cutting off the federal bribe.

    Sanddog in reply to 2smartforlibs. | July 2, 2021 at 11:25 am

    I wish mine would. We’ve got businesses desperate for workers and now that our state finally re-opened yesterday, they can’t fully open their businesses because people will not work if their bills are being paid for them.

      Paddy M in reply to Sanddog. | July 2, 2021 at 3:06 pm

      The idiot governor here is paying people to go back to work rather than eliminate the federal bribe.

In addition to some States ending enhanced unemployment benefits we are also seeing hiring of Citizens due to the reduction in many of the various visa employment categories.

Some of these were reduced by more than half. So the seasonal Summer workforce employers had no alternative but to hire Citizens and in many cases increase wages to attract employees.

Reduce the supply of foreign workers while demand for workers is constant or rising creates scarcity. Simple Econ 101; supply and demand. Now if we could just get these stories on the front page of our newspapers……

nordic_prince | July 2, 2021 at 11:16 am

Companies may be “desparate” for workers, but evidently not desparate enough to actually consider hiring older workers, nor to hire at wages that have kept up with rising prices…adjusting for inflation, workers are paid less than they were 20 years ago. I’ve been out of work since the scamdemic started, and despite having broadly applicable skills, varied experience, and two STEM degrees, I have yet to find a job. Applying to a job results in a “thanks but no thanks” response, if at all.

    Sanddog in reply to nordic_prince. | July 2, 2021 at 11:37 am

    The wages are a sticking point. The “cost” of employment is a lot higher today than it was 20+ years ago and unless you’re selling the necessities of life, there’s a ceiling for how much you can charge customers.

      nordic_prince in reply to Sanddog. | July 2, 2021 at 1:32 pm

      Yet how many companies continue to make record profits? (Talking mainly about larger corporations, not mom & pop biz.) How many CEOs manage to get juicy bonuses, while the average worker is underpaid to begin with and is told to consider himself lucky if he even gets a measely 3% raise?

      More and more companies view their workers as “human capital” – human widgets that are completely interchangable and can therefore be swapped out when they find a cheaper supplier. It’s also why companies tend to hire kids straight out of college and H1B workers… they know these will work long hours for peanuts.

      Couple that with the mistaken belief that older workers are going to “cost more” in terms of health benefits, and you arrive at the scenario that’s becoming increasingly common… wages driven down while profits are rising, rampant age discrimination, and employers ghosting qualified applicants while they bitch about “not enough workers.”

      Supply and demand – it’s not that there aren’t enough workers, it’s that companies can’t find enough workers who are willing to work for less than the market rate for labor. Getting rid of the perverse incentives to be on the dole will help some, but TBH employers have by and large been unwilling to pay market wages even long before the scamdemic hit.

        mark311 in reply to nordic_prince. | July 3, 2021 at 9:02 am

        It’s suprising that they wouldn’t employee you when there is a lack of workers? Do they give feedback on why they won’t employ you? I sympathise with your situation, it doesn’t sound fair at all.

        CommoChief in reply to nordic_prince. | July 3, 2021 at 11:51 am


        Which is why, IMO, no entity should be able to submit for or hire any category of foreign visa worker when that entity has refused to hire a US Citizen or lawful resident.

Illegal immigrants – doing jobs Americans no longer have to do in order to enjoy a far better life than three-fourths of the world’s population.