The labor department said Friday that 850000 jobs were created in June, with an unemployment rate of 5.9%, and the job market picked up after a spring lull. Such a figure also suggests that Fed tightening may come sooner than markets expect.

The Fed is closely monitoring wage growth, unemployment and other data to determine when and how quickly to withdraw measures to stimulate the economy. The recent employment report may affect its speed of action.

Job growth was lower than expected earlier this spring, despite a large number of job openings. There may have been a stronger trend of job growth in recent weeks. More people have been vaccinated against Covid-19; increased unemployment benefits in many states have ended or will end in early September; restrictions on businesses have been relaxed during the outbreak; and companies have been raising wages and bonuses to attract workers back. In a sign of health, the number of people applying for unemployment benefits fell 51000 last week to 364000, the lowest level since the outbreak, Labor Department data showed on Thursday.

Before the data were released, economists estimated that US employers created 706000 jobs last month and the unemployment rate fell to 5.6 per cent.

Non-farm payrolls data over the past two months have been disappointing, with a shortage of workers limiting the pace of recovery in many industries. Other data highlight these challenges. The Institute for supply Management's manufacturing employment index fell in June for the first time since November, and the labour "shortage" mentioned in the Fed's June beige book more than doubled from January.

Rubeela Farooqi, chief US economist at High Frequency Economics, said job growth could accelerate in the coming months, but it was unclear whether the constraints leading to labor shortages could be addressed by September.

"We are seeing progress in the labor market," said AnnElizabeth Konkel, an economist at job site Indeed. She believes that before unemployment reaches pre-epidemic levels, "we still have a little way to go."

Even with this growth, the labour market will still be about 6.6 million fewer jobs than it was before the outbreak. "there are still many factors that need to be stabilized in this economic recovery, such as vaccination rates, the development of new strains, and economies in other parts of the world," said Alfredo Romero, an economist at North Carolina agricultural State University. "

As the epidemic eased, states lifted business restrictions more comprehensively, stimulating activities in a variety of industries. With the help of government aid handed out earlier this year, consumers began to spend more and travel. Consumer spending, the main driver of economic growth, is expected to help the economy recover in the summer. At the same time, jobs have reached record levels this spring, and companies have increased capital investment.

Nevertheless, the current US economic recovery is still very uneven. Although the employment situation has improved, it still lags behind the growth of GDP, and workers are still in a wait-and-see state due to factors such as the expansion of unemployment benefits and increased child-care responsibilities.

Supply chain disruptions also continue to haunt some companies. Ford Motor Company said this week that a global shortage of computer chips would force it to cut production at more than six U. S. plants. These factors have pushed up prices and raised concerns about inflation.

"as we see the economic recovery, we are also making adjustments. The market is taking the time to understand what the new labor market will look like, "said Monica Garc í a-P é rez, an economics professor at St. Cloud State University in Minnesota. "I also think that this summer, the company will adjust the job types and job openings. "

As the labour market continues to improve, states have cancelled some epidemic-related benefits, and welfare distribution is expected to continue to decline this summer. In June, 22 states terminated federal programs that expire in early September. Four more are expected to do so in July.

Analysis by Jefferies LLC economists shows that the increase in federal benefits has had an impact on unemployment. "the increase in continued jobless claims is driven entirely by states that still enjoy higher benefits before September," the agency said in a report. Applications from states that expire early have fallen by 12.6% since mid-May, compared with 3.4% in states that expire in September. "