US employers added a substantial 4.8 million jobs in June, and the unemployment rate fell to 11.1%, as the job market improved for a second straight month, yet still remained far short of regaining the colossal losses it suffered this spring.
The nation has now recovered roughly one-third of the 22 million jobs it lost to the pandemic recession, according to the Labor Department’s jobs report released on Thursday. And with confirmed coronavirus cases spiking across the Sun Belt states, a range of evidence suggests that a job market recovery may be stalling. In those states and elsewhere, some restaurants, bars and other retailers that had re-opened are being forced to close again.
The number of Americans who sought unemployment benefits barely fell last week to 1.47 million, according to a separate report. Though that weekly figure has declined steadily since peaking in late March, it’s still more than double the pre-pandemic peak set in 1982. And the total number of people who are receiving jobless aid remains at a sizable 19 million.
California has re-closed bars, theaters and indoor restaurant dining across most of the state. Florida has also re-closed bars and beaches. Texas has reversed some of its efforts to reopen its economy. New York has paused its plans to allow indoor dining.
Thursday’s jobs report is based on data gathered in the second week of June, which helps explain why the figures reflect an improving trend. Last week’s plateau in work shifts will instead affect the July jobs figures, to be released in early August.
That trend has left more people in some states unemployed. The number of laid-off workers seeking jobless benefits rose last week in Texas, Arizona and Tennessee. Though the figure fell in California, it remained near 280,000 – more people than were seeking unemployment benefits in the entire country before the pandemic struck in March.
The US job growth in June was driven mainly by companies recalling workers who had been laid off when the coronavirus outbreak intensified in mid-March, causing widespread business shutdowns across the country.
Yet even as those temporary workers were recalled, more Americans said they had lost jobs permanently. This figure rose 600,000 last month to nearly 2.9 million. This is an ominous trend because workers who are permanently laid off typically face a much harder time finding new jobs. Most of them must find jobs at a new company or even switch occupations.
For June, the Labor Department reduced the number of people it said had been misclassified by government survey-takers who count how many Americans are unemployed. In a problem unique to the pandemic recession, many people have said in recent months that they were still working for companies that are shut down. These people were counted as employed.
Yet if they aren’t working, the Labor Department says they should be considered temporarily laid off and therefore unemployed. In April and May, adjusting for that error would have increased the unemployment rate substantially – to 16.4% in May, from the official 13.3%. For June, the misclassification affected fewer people, the government said. If these people had been properly counted as employed, the jobless rate would have been higher, at 12.3%, but still down from May’s adjusted figure.
US President Donald Trump touted June’s US jobs report Thursday as “spectacular news,” saying the return to work of 4.8 million Americans marks a huge comeback for an economy hit hard by the coronavirus pandemic. Speaking to reporters at the White House, Trump, who needs a strong economy to help his re-election bid in November, went through the report line-by-line, saying some of the job gains were records — without mentioning the massive losses suffered since March due to the pandemic. “Today’s announcement proves that our economy is roaring back,” Trump said. “The crisis is being handled,” he continued. “This not just luck, what is happening. This is a lot of talent.”
Wall Street opened higher on Thursday, with the Nasdaq hitting an all-time high as data showed the US economy added jobs at a record pace in June, the latest signal of a rebound in business activity following the easing of coronavirus-led lockdowns. European stock markets also rose on Thursday on hopes for the development of a coronavirus vaccine.
Investors were encouraged after Pfizer and BioNtech announced preliminary data from a vaccine test, one of a series being carried out by global developers. In Europe, the FTSE 100 in London rose 1% to 6,219 and Frankfurt’s DAX gained 2% to 12,504. The CAC 40 in Paris advanced 1.7% to 5,011. In Asia, the Shanghai Composite Index rose 2.1% to 3,090.57 and the Nikkei 225 in Tokyo added 0.1% to 22,145.96.
India’s Sensex added 1.6% to 35,966.50. New Zealand, Singapore and Jakarta also rose. Gold reversed course and edged higher on Thursday as the dollar eased, though the metal traded below an eight-year peak hit in the last session. Spot gold rose 0.3% to $1,775.66 per ounce by 11:04am, easing from the near eight-year high of $1,788.96 hit on Wednesday. US gold futures rose 0.4% to $1,787.50 per ounce. Oil prices rose on Thursday. Brent crude futures were up 78 cents or 1.86% at $42.81 a barrel by 1556 GMT, after rising 1.8% in the previous session. US West Texas Intermediate (WTI) crude futures rose 66 cents, or 1.66%, to $40.48 a barrel, adding to a 1.4% rise on Wednesday.