3 min read
. Updated: 02 Jul 2020, 06:22 PM IST
- The unemployment rate fell for a second month, by 2.2 percentage points to 11.1%, still far above the pre-pandemic half-century low of 3.5%
- US stock futures extended gains following the data
The rebound in the U.S. labor market accelerated in June as the economy reopened more broadly, though filings for unemployment benefits remained elevated last week as coronavirus cases picked up.
Payrolls rose by 4.8 million in June after an upwardly revised 2.7 million gain in the prior month, according to a Labor Department report Thursday. The unemployment rate fell for a second month, by 2.2 percentage points to 11.1%, still far above the pre-pandemic half-century low of 3.5%.
The June jobs report, reflecting a snapshot of mid-month conditions, encapsulates a flurry of rehiring after states lifted stay-at-home orders and began the process of reopening their economies during the pandemic. Adding to those gains in coming months may be critical to President Donald Trump’s reelection chances, as well as to the extension of a U.S. stock-market rally following the best quarter since 1998.
U.S. stock futures extended gains following the data. Treasuries and the dollar fell.
A separate report from the Labor Department showed initial applications for unemployment insurance in regular state programs fell by less than expected, to 1.43 million, in the week ended June 27. Continuing claims — or claims for ongoing unemployment benefits in state programs — rose slightly to 19.3 million in the week ended June 20.
Economists had forecast payrolls to rise by 3.23 million — the median in a range of 500,000 to 9 million — and an unemployment rate of 12.5%.
The Labor Department’s Bureau of Labor Statistics said it largely fixed a problem from recent months when many respondents had been misclassified as employed when they should have been labeled as unemployed. Adjusted for the errors, the June unemployment rate would have been about 1 percentage point higher — or 12.3%, compared with 16.4% in May.
A resurgence in virus cases has complicated the picture, leading states across the country to reverse or halt reopening efforts in hopes to slow the spread. That’s already led some rehired workers to get laid off once more. Paired with the coming expiration of the federal government’s extra $600 in weekly unemployment benefits, the economy could take another hit in the months ahead.
In addition, the weekly figures show the number of Americans claiming jobless benefits remains extremely elevated, posting the first increase in state programs in four weeks.
The increase in payrolls was led by leisure and hospitality and retail, illustrating the effect of the easing of business restrictions. Most sectors reported gains; mining and logging, along with utilities, were the only major industries to cut jobs.
State government payrolls fell by another 25,000, as budget situations grew more dire amid falling tax revenues.
Unemployment among minorities and women remained worse than among White Americans and men. The Black unemployment rate fell to 15.4% from 16.8%, while it declined to 10.1% from 12.4% among White Americans. Hispanic unemployment dropped to 14.5% from 17.6%.
Meanwhile, the household survey showed more than 2.8 million Americans permanently lost their job in June, a 588,000 increase from a month earlier that was the biggest since the start of 2009. While the total number is the highest in six years, the figure bears watching for more systemic damage to the labor market caused by the pandemic.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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