US workforce grows by almost one million in June

August 9, 2021

In our weekly Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.

Job growth in the United States exceeded expectations in the month of June, with payrolls climbing by 943,000 despite ongoing concerns over coronavirus.

The statistics were unveiled in a Labour Department report, along with the revelation of a pandemic low unemployment rate of 5.4%. The biggest gains came from the leisure and hospitality sector, with 380,000 new workers employed as the industry battles back from the pandemic’s devastating effects. The report, the best showing since strict lockdown measures were removed in the summer of 2020, offers the country renewed confidence as it moves towards autumn and winter.

Elsewhere, the Bank of England has suggested that “some modest tightening of monetary policy over the forecast period is likely to be necessary” should the economy evolve broadly in line with the bank’s central projections. The BoE, which left its monetary policy and quantitative easing program unchanged at its latest meeting, now expects interest rates to rise from 0.1% to 0.2% in 2022 and to 0.5% in August 2024.

In Asia, household spending unexpectedly fell 5.1% year-on-year in June. Domestic demand remained weak due to state of emergency restrictions, while cuts to employees’ summer bonuses also hit consumption. This weakness casts doubt on the Bank of Japan’s forecast that the benefits of the previously reported export-driven recovery will spread to households.

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