Real GDP rose at an annual rate of 6.4% for the first quarter of 2021

Total non-farm payroll employment jumped by 850,000 in June, resulting in a slight change to America’s unemployment rate to 5.9 per cent.

This is based on a report by the US Bureau of Labour Statistics (BLS).

BLS reports that, in June, “notable job gains occurred in leisure and hospitality, public and private education, professional and business services, retail trade, and other services”.

Leisure and hospitality employment rose by 343,000 in June 2021.

According to BLS, “employment rose by 155,000 in local government education, by 75,000 in state government education, and by 39,000 in private education”.

Disaggregating the employment data

While professional and business services added 72,000 jobs in June, employment in retail trade increased by 67,000 over the month. Other services added 56,000, social assistance (+32,000) and wholesale trade (+21,000).

Additionally, employment in mining increased by 10,000 jobs, and employment in manufacturing changed little in June (+15,000). Construction employment changed little in June (-7,000). Employment in transportation and warehousing increased slightly by 11,000.

Meanwhile, employment in other major industries, including information, financial activities, and health care were little changed in June. Notably, the number of persons on temporary layoff was unchanged at 1.8 million in June.

The number of permanent job losers stood at 3.2 million. While the number of long-term unemployed (those jobless for 27 weeks or more) stood at 4.0 million. Moreover, the number of unemployed persons who were jobless for less than five weeks in June stood at 2.0 million.

The labour force participation rate for June stood at 61.6 per cent, while the employment population ratio stood at 58 per cent. Persons employed part-time for economic reasons fell by 644,000 to 4.6 million in June.

BLS assessment of labour force data

Based on BLS assessment, “these individuals, who would have preferred full-time employment, were working part-time because their hours had been reduced or they were unable to find full-time jobs”.

In June, a total of 1.8 million individuals were slightly attached to the labour force.

These persons were not in the labour force, wanted and were available for work, and had looked for a job in the last year. Of the marginally attached, 6177,000 persons were classified as discouraged workers in June, relatively unchanged over the month.

Real GDP growth for Q1

Real gross domestic product (GDP) rose at an annual rate of 6.4 per cent for the first quarter of 2021, according to the third estimate released by the Bureau of Economic Analysis (BEA). This follows an increase of 4.3 per centin the fourth quarter.

The first quarter GDP increase reflected continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic.

BLS noted: “In the first quarter, government assistance payments, such as direct economic impact payments, expanded unemployment benefits and Paycheck Protection Program loans, were distributed to households and businesses through the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act.”

The upward movement in real GDP for the first quarter was mainly attributed to increases in personal consumption expenditures (PCE), non-residential fixed investment, federal government spending, residential fixed investment, and state and local government spending but was partly offset by declines in private inventory investment and exports.

Moreover, imports increased. Notably, the increase in PCE was due to increases in durable goods led by motor vehicles and parts, nondurable goods, which was led by food and beverages and services which was led by food services and accommodations.

There was also an increase in non-residential fixed investment which revealed increases in equipment led by information processing equipment and intellectual property products led by software.