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June's Labor Data Is Not As Strong As Many Employers Would Have Liked

RACHEL MARTIN, HOST:

The pace of hiring is picking up but not as quickly as many employers would like. The Labor Department said this morning that employers added 850,000 jobs in June. Many businesses say they'd like to hire more folks if they had more applicants.

NPR's Scott Horsley joins us now to talk about all this. Hey, Scott.

SCOTT HORSLEY, BYLINE: Good morning, Rachel.

MARTIN: So this is relatively good news, right?

HORSLEY: Yeah. Hiring is picking up. And in normal times, 850,000 jobs would be a blockbuster. It is an acceleration from the revised 583,000 jobs we added in May. And it's a big improvement from that disappointing April jobs report, when only 269,000 jobs were added.

MARTIN: Right.

HORSLEY: But as you mentioned, we could be looking at even stronger job growth given the really robust demand we're seeing from consumers as pandemic fears slip into the background and more people are out traveling, dining out, doing all the things that were off-limits for much of the last year. Remember, we're still about 6.8 million jobs short of where we were before the pandemic. Yesterday, the Congressional Budget Office said they thought we would get back to that pre-pandemic employment level by the middle of next year.

MARTIN: So let's talk about where the jobs are being added. What industries are we seeing?

HORSLEY: Yeah. Bars and restaurants added a lot of jobs last month - 194,000. Hotels added another 75,000 - recreation centers about the same. That whole leisure and hospitality sector was really hammered during the pandemic. And it has been making a strong comeback in recent months. It's still about 2.2 million jobs short of where it was before the recession though.

Factories added 15,000 jobs last month, which is just sort of OK. But factories are struggling. A lot of factory managers say they're having trouble finding new workers. And they're losing their existing workers to better-paying or more attractive jobs elsewhere. That's making it hard for manufacturers to keep up with demand.

The construction industry actually shed jobs last month. There are some signs of a slowdown in what has been a really robust homebuilding sector. And on the plus side, a lot of hiring by schools in June - more than 250,000 jobs added in education - there is some noise in those numbers. But it suggests a return to more in-person learning. And that's a positive sign for a lot of stay-at-home moms and dads that they might be more able to go back to work in the future.

MARTIN: I'm going to describe a tweet to you. Our co-host Steve Inskeep is out traveling around the country. And he tweeted the other day a photo of a hotel in Wyoming. They were offering $15 an hour for housekeepers. I mean, there are a lot of people who are sitting on the sidelines right now. Just describe how tough it is for employers to find workers and why.

HORSLEY: Yeah. There seems to be a bit of a mismatch in terms of timing and urgency. For employers who managed to make it through the pandemic, this should be a boom time. Demand is roaring back. More people are traveling, as we said. They want workers, like, yesterday.

On the other hand, would-be workers are on a somewhat different schedule. There was a survey by the job search website Indeed, which found most job seekers do plan to go back to work in the next few months. But they're not necessarily in a rush. A lot of them are waiting for schools to reopen or for more people to get vaccinated. In some cases, they're waiting for their accumulated savings to run out.

Thanks to the fairly aggressive government relief efforts, people do have enough of a financial cushion, in many cases, that they don't have to jump at the first job that's offered. They can hold out for a better job - maybe a little bit more money. In the long run, that's good for the economy, even if it does cause some gritted teeth for employers right now.

MARTIN: Right. What should we look for in months to come, Scott?

HORSLEY: Well, the pace of hiring has been ramping up in each of the last two months. It would be good to see that trend continue. We've so far recovered less than 7 out of 10 jobs that were lost during the pandemic. It might take a little longer. You know, a year ago at this time, we had a huge hiring boom - nearly 5 million jobs added last June. But back then, people were mostly going back to their old jobs. Now more of them are going to new jobs - sometimes whole new industries. And for both workers and employers, that's just a more time-consuming process.

MARTIN: NPR's chief economics correspondent, Scott Horsley - we appreciate it, Scott. Thanks.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.