UPDATE - US economy adds 850,000 jobs, unemployment rises to 5.9%

ADDS US PRESIDENT'S COMMENTS

By Ovunc Kutlu

ANKARA (AA) – The US economy added 850,000 jobs in June, but the unemployment rate rose to 5.9%, the Department of Labor announced Friday in a statement.

The market estimate for nonfarm payrolls was an increase of 700,000, while job additions for May were revised up by 24,000, from 559,000 to 583,000, according to data by the Bureau of Labor Statistics.

Despite the job additions, the unemployment rate increased to 5.9% in June, much higher than the estimate of 5.7%. It stood at 5.8% in May.

The number of unemployed individuals in the US rose to 9.5 million in June, up from 9.3 million the previous month.

Although the labor market in the world's largest economy still remains weak, the Federal Reserve signaled last month it could make two rate hikes in 2023 by 0.25% each.

The dovish vs hawkish division among the Federal Open Market Committee members became more evident last month, especially with the Fed Chair Jerome Powell that has repeatedly said in recent months the central bank would wait until labor market recovers and full employment is reached before raising interest rates.

The latest jobless figures "are down considerably from their recent highs in April 2020 but remain well above their levels prior to the coronavirus pandemic," the Department of Labor said in its statement.

"In June, the number of long-term unemployed, those jobless for 27 weeks or more, increased by 233,000 to 4 million, following a decline of 431,000 in May. This measure is 2.9 million higher than in February 2020," it added.

Due to COVID-19, more than 22 million people in the world's largest economy lost their jobs in March and April 2020.

About the job figures in June, President Joe Biden said the US has created an average 600,000 jobs per month since he took office in January, noting his administration created over 3 million jobs since then.

"More jobs have ever been created in the first five months of any presidency in modern history. This is historic progress, pulling our economy from the worst crisis in 100 years," he told in a press conference in the White House.

"Today, the US is the only major advanced economy where the OECD [Organization for Economic Cooperation and Development] projection of future output are higher today than they were in January 2020 before the pandemic hit," he said.

"In February, the Congressional Budget Office (CBO) projected 2021 economic growth would be 3.7%. Yesterday, they doubled that number to 7.4% ... The last time economy grew at this rate was 1984," he added.

Biden highlighted the dramatic progress in vaccinations and beating the pandemic, and pointed out to his American Rescue Plan -- the $1.9 trillion economic stimulus bill that he signed into law on March 11.

"More jobs, better wages, that's a good combination. To put simply, our economy is on the move and we have COVID-19 on the run ... We are aiming full employment. That means keeping our pace on job growth, including Black, Hispanic and Asian workers. This progress is testament to our commitment to grow this economy from the bottom up and the middle out," he told.