The US economy added 4.8 million more jobs than expected in June despite a worsening COVID-19 pandemic, recording a solid rise for the second month in a row after suffering a Great Depression loss that nearly occurred in the spring, the government reported Thursday.
Reflecting June’s increase, the country’s unemployment rate fell to 11.1% after reaching 13.3% in May and 14.7% in April.
President Trump hailed the report as economic evidence “roared back,” and defended his handling of the health crisis. “We did not wither. And our country did not wither,” he said at an impromptu White House press conference.
While months of increasing numbers of consecutive months offer a place of hope, they may be an uncertain guide to the future. Coronavirus cases, as well as hospitalization and infection among younger Americans, have exploded in California and other states in the West and South.
As a result, many fields were reopened for business, and thus began to call back workers, turn around and impose more restrictions.
“This report may be a kind of high point,” said Heidi Shierholz, former chief economist at the Labor Department now at the Institute for Economic Policy.
California employment figures for June will be released July 17, and are likely to reflect national trends, albeit at a weaker pace. The state unemployment rate for May was 16.3%, little changed from April, because job creation lags somewhat. Unemployment in Los Angeles County was 20.9% in May.
Even with June profits, overall unemployment has remained higher than at any time since the Bureau of Labor Statistics records began in 1948.
The unemployment rate fell overall, but the disparity remained significant. Black unemployment is 15.4% compared to 14.5% for Latinos, 13.8% for Asians and 10.1% for whites. Unemployment for tertiary education graduates fell to 6.9% versus 12.1% for workers with only high school education.
The Bureau of Labor Statistics said the overall unemployment rate for the country might actually be 1 percentage point higher than the 11.1% reported due to complications in survey collection. Misclassification of worker status has resulted in an undercount that is far greater than unemployment in the previous two months.
Separately Thursday, the Labor Department said 1.43 million people applied for unemployment benefits last week. It was the fourth consecutive week in which around 1.5 million workers had filed new jobless claims – six times more than before the pandemic – indicating continued pressure on the labor market.
The country overall lost 22 million payroll jobs in March and April, and now has regained about a third of them. But that doesn’t include the millions of workers whose work hours are reduced to part-time workers and who leave the workforce because they don’t see much out there or remain on the sidelines due to health problems.
Like economists and other policy makers, Shierholz expressed concern that most federal government pandemic aid packages are scheduled to expire in a few weeks, including extended unemployment insurance benefits.
“We might see us losing our jobs in the coming months,” he said, blocking new actions by Congress and Trump to extend the program.
For Southern California and also the country as a whole, layoffs caused by the pandemic are most concentrated in leisure and hospitality – especially restaurants and hotels – as well as retail stores and health and social services.
In June, the recreation and hospitality sector added 2.1 million new jobs, or two-fifths of a month’s total salary.
In May, California followed the restoration of these jobs, which partly reflected the slow reopening of business and the country’s disproportionate dependence on tourism and trade.
Los Angeles and San Francisco, for example, have lost thousands of Chinese tourists who have arrived with about 150 weekly flights from various parts of China, said Manfred Kiel, chief economist at the Inland Empire Economic Partnership. It all stopped with a pandemic.
“We will recover slowly, wisely,” he said.
The decline in employment began in March with low-wage service jobs such as food services, barber shops and cinemas. But recently the impact of the pandemic has spread to higher paid professional and technical jobs.
One of the signs can be seen in job openings. Since the beginning of June, when more local and regional economies have reopened across the country, Glassdoor job search sites have seen a resurgence in opening for consumer service jobs including travel and tourism as well as beauty and fitness.
But job openings in the media, information technology, computer software and accounting and legal services have declined. Consistent with that, Thursday’s employment report showed employment in computer system design and related services fell by 20,000.
“When demand from businesses and consumers decreases, economic uncertainty increases, and there is little demand for actually recruiting new workers, even in industries where remote employment is possible,” said Daniel Zhao, Glassdoor’s senior economist. “This is sort of the second wave effect that is rippling in the economy due to the COVID-19 crisis.”
Analysts say unemployment might increase in the coming months as a result of a surge in COVID-19 cases, or if people who leave the labor force return to find work, and thus will be counted as unemployment.
In addition, summer usually brings a flood of new college graduates entering the job market – and this year they are entering one of the worst job markets in history, said Amanda Stansell, a senior research analyst at Glassdoor.
In May, he said, the number of open jobs at Glassdoor containing “entry level” or “new graduates” in that position fell by 68% from this time last year.
The unemployment rate for workers aged 20 to 24 years was 19.8% in June, doubling for prime age workers aged 25 to 54 years and for older workers.
Times staff writer Chris Megerian contributed to this report.
