US hiring accelerated in June as workers earned higher pay

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WASHINGTON — In an encouraging burst of hiring, America’s employers added 850,000 jobs in June, well above the average of the previous three months and a sign that companies may be having an easier time finding enough workers to fill open jobs.

Friday’s report from the Labor Department was the latest evidence that the reopening of the economy is propelling a powerful rebound from the pandemic recession. Restaurant traffic across the country is nearly back to pre-pandemic levels, and more people are shopping, traveling and attending sports and entertainment events. The number of people flying each day has regained about 80% of its pre-COVID-19 levels. And Americans’ confidence in the economic outlook has nearly fully recovered.

The report also suggested that American workers are enjoying an upper hand in the job market as companies, desperate to staff up in a surging economy, dangle higher wages. In June, average hourly pay rose a solid 3.6% compared with a year ago — faster than the pre-pandemic annual pace. In addition, a rising proportion of newly hired workers are gaining full-time work, as the number of part-time workers who would prefer full-time jobs tumbled — a healthy sign.

“That underscores the growing bargaining power of labor,” said Joe Brusuelas, chief economist at RSM, a tax advisory firm. “There’s increasing confidence that they’re going to get better jobs at better wages as the U.S. economy expands.”

Speaking at the White House, President Joe Biden touted the job gains and suggested that his economic policies, including a $1.9 trillion economic relief plan that was enacted in March, were intended to make it easier for workers to find higher-paying jobs.

“The strength of our recovery is helping us flip the script,” Biden said. “Instead of workers competing with each other for jobs that are scarce, employers are competing with each other to attract workers.”

The Republican National Committee responded by noting that job gains have been stronger in Republican-run states, where governors have moved to cut off a $300-a-week federal unemployment payment to try to prod more people to seek jobs.

Friday’s report showed that the unemployment rate rose from 5.8% in May to 5.9% in June. Despite the job market’s steady gains, unemployment remains well above the 3.5% rate that prevailed before the pandemic struck, and the economy remains 6.8 million jobs short of its pre-pandemic level.

With competition for workers intensifying, especially at restaurants and tourist and entertainment venues, some employers are also offering signing and retention bonuses and more flexible hours. The proportion of job advertisements that promise a bonus has more than doubled in the past year, the employment website Indeed has found.

Those inducements are gradually drawing more workers off the sidelines. The proportion of Americans in their prime working years — ages 25 to 54 — who are either working or looking for work rose at a solid pace, though it remains below pre-pandemic levels.