U.S. adds 4.8 million jobs as unemployment falls to 11.1%
WASHINGTON » U.S. 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 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 re-closings are keeping layoffs elevated: 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.
“This is a bit of a dated snapshot at this point,” said Jesse Edgerton, an economist at J.P. Morgan Chase.
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 U.S. job growth in June was driven mainly by companies recalling workers who had been laid off when the coronavirus outbreak intensified in midMarch, 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.
“Even as we move into the second half of the year, a large number of people will still be looking for work,” said Eric Winograd, senior U.S. economist at asset manager AllianceBernstein.
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.
Credit and debit card data tracked by JPMorgan Chase show that consumers reduced their spending last week after having increased it steadily in late April and May. The reversal has occurred both in states that have reported surges in COVID-19 and in less affected states, said Jesse Edgerton, an economist at J.P. Morgan.
Nationwide, card spending fell nearly 13% last week compared with a year ago. That’s worse than the previous week, when year-overyear card spending had fallen just under 10%.
And Kronos, which produces time management software, has found that in the past two weeks, growth in the number of shifts worked has slowed in the Southeast and is now rising at just half the rate of the Northeast.
“The pace of recovery is starting to slow,” said Dave Gilbertson, an executive at Kronos. “We are expecting to see more of a plateauing over the next couple of months.”