Job gains tempered by concern over new surge in virus cases

Employers brought back millions more workers in June as businesses began to reopen across the country. But the recent surge in coronavirus cases is threatening to stall the economic recovery long before it has reached most of the people who lost their jobs.

U.S. payrolls grew by 4.8 million in June, the Labor Department said Thursday. It was the second month of strong gains after April’s huge losses, when businesses laid off or furloughed tens of millions of workers as the pandemic put a large swath of economic activity on ice. The job growth surpassed economists’ forecasts, and it was broadbased, cutting across industries and demographic groups.

But the thaw is far from complete. There were still nearly 15 million fewer jobs in June than in February, before the pandemic forced businesses to close. The unemployment rate fell to 11.1 percent in June, down from a peak of 14.7 percent in April but still higher than in any previous period since World War II. The rate would have been about 1 percentage point higher, the Labor Department said, had it not been for persistent data-collection problems.

In an appearance at the White House on Thursday morning, President Donald Trump hailed the numbers as “spectacular news for American workers and American families and for our country as a whole.”

The monthly jobs data was collected in mid-June, before coronavirus cases began to spike in Arizona, Florida and several other states. More timely data, also released by the Labor Department on Thursday morning, showed that 1.4 million Americans filed new claims for state unemployment benefits last week — the 15th straight week that the figure exceeded 1 million — and another 840,000 filed for benefits under the federal Pandemic Unemployment Assistance program.

With the resurgence of the virus adding new volatility to the outlook, economists fear that layoffs could accelerate now that states have begun ordering some businesses to close again.

And they warn of another looming threat: the expiration of government assistance, in particular the enhanced unemployment benefits providing an extra $600 per week to laid-off workers. Without congressional action, those benefits will cease at the end of this month, potentially eliminating a key source of support not just for the workers but for the broader economy as well.

The Congressional Budget Office said Thursday that it expected the economy to grow rapidly in the next six months but still wind up nearly 6 percent smaller than it was when the year began.

“We’re in a very deep hole, and we just set ourselves back again,” said Diane Swonk, chief economist at the accounting firm Grant Thornton.

The number of people reporting they had permanently lost their jobs rose in June even as the number of workers on temporary layoff fell sharply for the second consecutive month. And the share of Americans out of a job for 14 weeks or less fell in June, while the share unemployed longer continued to rise — another sign that while short-term job losses are abating, more enduring damage lingers. “There’s only so long that these businesses can hold out before it just doesn’t become feasible, said Olugbenga Ajilore, a senior economist at the Center for American Progress, a progressive group.”

The rebound in jobs has not been shared equally across groups. The unemployment rate for white workers has fallen more than 4 percentage points over the past two months, to 10.1 percent. For Black workers, the rate has fallen just over 1 point, to 15.4%.