Payroll increased in June, small business loans could follow
Last week ended on a positive note with an increase in the wage bill in June, faster than any previous month since September. Companies are showing signs that workers are ready to return to work when offices reopen.
Payrolls have increased by over 800,000 by some estimates, with travel and leisure leading the way. Unemployment increased, however, approaching 6%. The higher number of unemployed was due to the fact that people actually started looking for work and decided to leave the labor market for a while. Over 300,000 of the jobs were likely to come from travel and recreation-related positions.
A spokesperson for Indeed, the job search company, said employers are adding jobs at an increasing rate even though it is still difficult for employers to find qualified people.
Does a payroll gain mean pressure on the Federal Reserve? Not necessarily, because the payroll is still down by almost 7 million compared to pre-pandemic standards. The result is a stable stock market today. Employers are always looking to keep pace with a growing economy, and projections of labor needs are still somewhat unpredictable.
It is particularly interesting that the number of male African-American workers has reached its highest level according to Bloomberg Financial Markets.
The positive flows could make more companies look for bank loans, this time not for bailouts but for positive growth initiatives, although many companies are still asking for a loan forgiveness as part of the PPP initiative. As wages inevitably increase, business costs will likely increase even if consumer demand appears to keep pace.
President Biden said, âThe strength of our recovery is helping us reverse the scenario. Instead of workers competing for scarce jobs, employers compete for workers. ”
Hiring bonuses have risen dramatically even as average weekly hours have declined, clearly signaling a challenge. Average weekly hours have fallen to less than 35 hours per week.
The national minimum wage debate may become increasingly irrelevant in the short term as the demand for skilled workers will drive up wages