Economy added 850,000 jobs in June
KPMG Chief Economist Constance Hunter says overall the report points to encouraging signs for the future.
The economy added 850,000 jobs in June, surpassing market expectations for 700,000 jobs while the unemployment rate ticked up slightly to 5.9% from 5.8% and the labor force participation rate was steady at 61.6%.
The economy added 850, 000 jobs and this is a steady improvement over the past two months. But more importantly what it shows about the future is very encouraging. The percentage of workers that are working at home due to the pandemic fell to 14.4 percent. Now that's from a high of 35 percent last year and what this suggests is that central business districts will slowly come back to life. We expect that to be an accelerated pace once we hit September and people are back in school full time. So, this suggests positive news for central business district real estate and for all of the leisure and hospitality and retail businesses that support central business districts. Furthermore, we got a strong increase in leisure and hospitality employment showing that people are going back to these activities as the economy continues to open up and more people are vaccinated. Finally, we got some very interesting information about wages. Now it is important to note that year over year data is distorted by the pandemic. So, we look at levels and we look at the difference between those people who can work from home and those people who can work from their job site and we know for people that can work from home, there's a much lower unemployment rate, almost two and a half percent and so there is more consistent wage pressure among this segment of the labor force and we expect that to remain until the end of the coming expansion should be about five years. Conversely, for people who have to work from their job site we have a higher unemployment rate and lumpier but higher wages. This is the segment where we hear anecdotes of thousand dollar bonuses and increases to get people back to work. This is the segment of the population that is least likely to have received at least one vaccine and also the segment of the population that is likely to be facing the most challenges around childcare.