Despite widespread worker shortages, U.S. hiring accelerated in June as employers added 850,000 jobs amid declining COVID-19 cases, a reopening economy and increasing vaccinations.

The unemployment rate, which is calculated from a different survey of households, ticked up from 5.8% to 5.9%, the Labor Department said Friday. 

Economists had estimated that 720,000 jobs were added last month, according to a Bloomberg survey.

So far, the U.S. has recovered 15.6 million, or 70%, of the 22.4 million jobs lost last spring, leaving the nation 6.8 million jobs below its pre-pandemic level.

Leisure and hospitality, the industry hit hardest by the pandemic, again led the gains, adding 343,000 jobs, including 194,000 at restaurants and bars, as more states ended capacity limits.

Local, state and private education added 269,000 jobs but those advances represented a quirk of Labor’s seasonal adjustments. School employees typically come off payrolls in June and July. But since fewer education workers are employed because of the pandemic, fewer dropped off and that translated into a big gain after seasonal adjustments.

Professional and business services added 72,000 jobs. Retail added 67,000 as more stores reopened. And manufacturing, which has been beleaguered by supply-chain bottlenecks, added 15,000.

Even live theater, perhaps the sector that absorbed the biggest blow from the pandemic, is coming back and hiring again.

In March 2020, Chad Brown, 40, was laid off from his job booking musicians, comedians and other acts at a venue in Denver while his wife, Kaytlain, could no longer work as a massage therapist.

Brown got a part-time job at a company that prepares meal kits while Kaytlain received unemployment benefits, but their income wasn’t enough to make ends meet in Denver. So a year ago, the couple and their 8-month-old son moved in with Kaytlain’s parents in Montana. Chad bartended once a week while Kaytlain worked as a restaurant server.

In March, Chad noticed a few theater-related job postings and began applying for positions across the country. In mid-May, he landed a position as manager of a restaurant, bar and private events at a theater preparing to stage plays and musicals in Phoenix. He started this week. Such productions better fulfil Chad’s career goals than his previous theater job, and he hopes to rise to artistic director in Arizona or another theater.

 

“It was very exciting,” Chad says of the job offer. But, he says, “I still think it’s going to take a long time” for patrons to return to the theater.

Earlier this spring, job gains were strong by historical standards but fell well short of the 1 million advances per month that many forecasters were anticipating.

The problem: Businesses are still struggling to find enough workers, surveys show, with many economists partly blaming a federal bonus in unemployment benefits that may discourage some people from returning to work or taking new jobs. Others are taking care of kids who are still distance learning or are afraid of contracting the coronavirus.