U.S. creates 4.8 million jobs as unemployment falls to 11%

Andrew Cummings
July 5, 2020

More than 23 percent of those unemployed are teenagers who want full-time, entry-level jobs, and 15.4 percent are black Americans.

In an ominous trend contained in the Labor Department report, the number of Americans who said they lost their jobs permanently rose by 600,000 last month to almost 2.9 million.

The job gains of the past two months have partly resulted from unprecedented levels of government spending, including $1,200 relief checks, more than $500 billion in grants to small businesses, and an extra $600 a week in unemployment benefits.

The US economy notched its second straight month of job additions in June amid nationwide efforts to claw back from a coronavirus-induced recession.

Economists polled by Reuters had forecast payrolls would increase by 3 million jobs in June.

The June gain follows a May gain of 7,000 jobs and an April loss of 68,000 jobs, according to revised and seasonally adjusted numbers released Thursday by the U.S. Bureau of Labor Statistics.

More workers returned to employment in June, with 4.8 million added to payrolls, nearly double May's gain. Education and health services, manufacturing, and professional and businesses services also added jobs in June.

The measurement of the unemployment rate continued to be biased downward by people misclassifying themselves as being " employed but absent from work" last month. Among Latinos, unemployment dropped to 14.5 percent from 17.6 percent.

The number of individuals claiming unemployment insurance on an ongoing (as opposed to temporary or short-term) basis is 19.2 million.

"These workers will likely struggle to regain employment in an economy facing suppressed demand", said Beth Akers, senior fellow at the Manhattan Institute. U.S. Treasury prices were trading higher. The runner-up sector, retail trade, was far back, with a gain of +5.4%.

Hotels, restaurants, bars and casinos added 2.1 million jobs last month, the most of any industry. Those funds are drying up and many companies, including some not initially impacted by lockdown measures, are struggling with weak demand, forcing them to lay off workers.

New unemployment claims are still high in DE, though they have levelled off in recent weeks. Including a program funded by the government, 2.3 million people filed claims last week.

The department and state and federal law enforcement agencies are still investigating how much money in benefits may have been lost to fraud and the organizations allegedly responsible, Picard added.

The Bureau of Labor Statistics said the overall unemployment rate for the nation might actually be 1 percentage point higher than the 11.1% reported due to complications in survey collection.

Over 19 million people across the country continue to rely on unemployment aid.

Closely watched continuing claims, which lags initial jobless claims data by one week, totaled 19.29 during the week ending June 20, up from 19.23 million in the prior week. The additional USD600 in unemployment ends on July 31.

"Failure to take action would severely dent the chances of a rapid recovery", said James Knightley, chief global economist at ING in NY.

Other reports by iNewsToday