U.S. employers added 850,000 jobs in June, as private sector hiring finally picks up, but the unemployment rate drifted higher to 5.9%, up from 5.8% in May. Job gains were better than expected, following two consecutive months of fewer job gains than anticipated, and may be a sign that more Americans are ready to return to the workforce as vaccination rates rise and the economy reopens. Around 70% of jobs lost during the pandemic have returned so far, but that is still 6.8 million jobs short of pre-pandemic levels.

The unemployment rate and number of unemployed persons hardly budged in June, hovering at 5.9%, with 9.5 million unemployed. While these measures are down considerably from their recent highs in April 2020, the U.S. Department of Labor (DOL) acknowledged that they remain well above their levels prior to the onset of the pandemic last year. In February of 2020, the unemployment rate was 3.5%, and 5.7 million Americans were out of work. The labor force participation rate remained unchanged at 61.6%.

The number of long-term unemployed (those jobless for 27 weeks or more) increased by 233,000 to 4 million in June, following a decline of 431,000 in May. This measure, according to the DOL, is 2.9 million higher than in February 2020. The long-term unemployed now account for 42.1% of unemployed individuals in the U.S.

Where the Job Gains Are

Job gains in June were primarily led by the services sector, with 343,000 jobs added in the restaurant and hospitality industry, which was among the hardest hit during the pandemic. Here's a breakdown of where hiring was strongest:

Average hourly earnings for all employees continues to rise, climbing another $0.10 in June, following increases in May and April of $0.13 and $0.20, respectively. Employers have steadily raised wages to lure unemployed workers back into the workforce as demand surges amid the reopening of the economy.

Unemployment by race continues to be uneven, as the rate for Black workers is nearly double that of White and Asian workers, the DOL reports.