Hiring ramps up, jobless rate stagnant

850,000 jobs were added to payrolls in June, according to the U.S. Labor Department. That’s better than what most economists were looking for. But, there was no improvement in the unemployment rate. In fact, it rose ever so slightly, 0.1% to 5.9%. By contrast, one year ago, the unemployment rate was in double digits, standing at 11.1%.

Those numbers, as with any statistics, don't tell the entire story. There are millions more who are underemployed, meaning they're working part-time but would like full-time work, or have exited the labor force, another way of saying they're not working or looking for work.

June’s surging payroll gains provide some needed reassurance that the healing of the job market remains a work in progress.?The June showing is solidly above this year’s monthly average pace of more than 500,000 jobs added or recovered. Even so, a new Bankrate survey of economists finds some caution about the outlook for further hiring gains over the next year, while looking for the unemployment rate to fall to 4.5% by this time next year.

As expected, the sector on the leading edge of job loss during the downturn, namely leisure and hospitality, is at the front of the continuing hiring parade. Within that category, most of the improvement was in bars and restaurants, with hotels as well as live sports and entertainment jobs on the rise. The reopening of the economy, bolstered by the successful vaccination effort, is helping to put people back to work.?

Wages and inflation

Wage gains are present, with a year-over-year gain of 3.6%.?There’s no doubt that some employers are having to do more to attract workers. And retention of current employees will also be a challenge for business in the coming months. As the economy has recovered from last year's devastating downturn, including the loss of 22 million jobs in March and April 2020, the balance of power has shifted from employers to workers. On the inflation question, one person’s, or employer's, wage pressure is another person’s money in the bank, underscoring that there are literally two sides of the coin in play here. The longer-term, key question is whether inflation will run hotter and remain more persistent beyond the current supply and labor squeezes. This part of the story will be closely watched, including by the Federal Reserve, here in the second half of the year.

LINK: Should you worry about inflation?

Beyond the immediate reaction, worth noting that the jobless rate has been hanging around this level since March with 6.0%, 6.1%, 5.8% and now 5.9%. This underscores how the Fed's goal of further substantial progress in the economy isn't a box that can be checked just yet. Nevertheless, we should expect Fed officials to further enunciate in the coming months their plans for removal of the extraordinary measures put into place early in the COVID-19 caused downturn . That means a pledge to keep interest rates lower for longer, might have less lasting meaning.

The strong performance of the stock market has, to some degree, been reliant on that pledge. Does that put stock prices at risk? That's another outcome we'll have to monitor to see how it is resolved, or not. Professional investors, surveyed by Bankrate, look for a solid showing for the benchmark S&P 500 index over the next year .

Now, it is your turn. Please let me know, in the comments section below, about your thoughts, observations and experiences with the job market and your own personal finances.

Mark Hamrick is senior economic analyst and Washington Bureau Chief for Bankrate.com.?

Follow on Twitter:?@Hamrickisms