By Sarah Chaney
The U.S. economy likely regained millions of lost jobs in June,
though a rise in coronavirus infections in several states could
hamper the labor market's recovery.
An increase in the number of employed workers, if reflected in
Thursday's jobs report, would show Americans are slowly getting
back to work and further improvement from the labor market's April
bottom. But it would still leave the U.S. with about 17 million
fewer jobs than in February, the month before the coronavirus
pandemic struck the U.S. economy.
Economists surveyed by The Wall Street Journal expect employers
added 2.9 million jobs in June, following May's payroll gain of 2.5
million, and an unemployment rate of 12.4%, down from 13.3% in May.
Before the coronavirus drove the U.S. into a deep recession, the
jobless rate was hovering around a 50-year low of 3.5%.
Hiring last month was supported by business reopenings and
government aid. States across the U.S. reopened restaurants, gyms
and salons that had been shut for several weeks to contain the
spread of the coronavirus. Small businesses that tapped federal
loans through the Paycheck Protection Program continued to recall
"We're in the beginning of a slow recovery," said Marianne
Wanamaker, a labor economist at the University of Tennessee, who
previously served as an economist in the Trump administration. "I
think the recovery will stall out if we don't get control of the
Some states are reversing or pausing reopening plans as
coronavirus infections surge in the South and West. Thursday's jobs
report, which is based on survey data largely collected in
mid-June, won't reflect these recent government-mandated business
closures and related layoffs. The report is coming out a day
earlier than usual because Friday is the observed Independence Day
A separate report from the Labor Department, also to be released
Thursday, tracks the number of applications for unemployment
benefits filed every week. Unemployment claims have come down from
a peak of nearly 7 million in late March but have stabilized near a
historically high 1.5 million, an indication companies continue to
"The big picture is this is still an emergency," said Lisa Cook,
economics professor at Michigan State University. "There are small
businesses and other businesses that are permanently closing."
States where the coronavirus is spreading the most are
experiencing a slowdown in economic activity, investment-banking
firm Jefferies said at the end of June. The number of hours worked
at small businesses hit its most recent peak in mid-June and has
since dropped off in places including Texas and Arizona, data from
scheduling and hiring software provider Homebase show.
In recent days, Texas required that bars close and Florida
imposed new restrictions on bars. New York Mayor Bill de Blasio
announced that the city would delay the planned reopening of indoor
dining at restaurants.
Tubing rental company Texas Tubes won't be open to send
customers floating down the 2-mile Comal River this Fourth of July
weekend -- normally one of the busiest times of the year for the
New Braunfels, Texas, company.
Last week it had to cease operations and lay off its staff of
about 30 employees when Gov. Greg Abbott ordered the halt of
water-recreation outfitters, said Texas Tubes' owner, Coley
"Our season is only so long, so if this thing goes to September,
then we're done for the year," Mr. Reno said. He added that the
tubing center's closure would hit the small Texan city's tourism
economy because there would be fewer out-of-town guests to dine at
nearby restaurants and sleep in Airbnbs.
Still, many industries have been able to add workers after
experiencing losses earlier in the economic crisis. In May, U.S.
restaurants and bars -- one of the sectors hardest hit by the virus
-- added 1.4 million jobs, a trend that likely continued in June as
more states reopened their economies.
At the beginning of the pandemic, customer traffic declined and
hiring froze at Teriyaki Madness, a Denver-based franchised
"But then people kind of woke up and said, 'This could last for
a while, '" said Michael Haith, the company's chief executive.
Consumers started ordering more online and driving in for
curbside pickup of teriyaki chicken-and-rice bowls, helping boost
same-store sales at Teriyaki Madness. Now the fast-casual chain is
adding 10 stores that will need 25 employees each in positions such
as cook, cashier and general manager.
The economic effects of the pandemic have varied across
demographic groups. The jobless rate in May was 17.6% for Latinos
and 16.8% for Black people, compared with 15% for Asian-Americans
and 12.4% for white people.
The economy entered a recession in February and appeared to
begin a recovery as early as April. The speed at which businesses
hire and consumers spend depends, in large part, on the course of
the virus. Many Americans remain hesitant to shop in stores or eat
at restaurants as coronavirus cases increase.
Stephanie Casebeer, 45 years old, has been temporarily out of
work during the pandemic as a group fitness instructor at
She said many of her students have indicated they aren't ready
to return to in-person workouts, and gyms have continued to delay
reopening yoga and cycling classes as coronavirus cases in Florida
rise. She worried it will be tough financially for gyms to rely on
"It's made me nervous," she said. "How am I going to make my
living doing what I enjoy for the next couple of years?"
Ms. Casebeer said unemployment benefits, which include an extra
$600 a week from a federal stimulus bill, have helped her while she
is without a job. She is still eager to return to teaching classes
even though she makes more on unemployment benefits than she would
as a group-fitness instructor.
"I like what I do enough to not necessarily care about keeping
the extra $600," Ms. Casebeer said. "I want to go back to work, and
I want to go back to work safely."
The June jobs report will likely inform congressional debate
over the next federal coronavirus relief bill. Republicans and
Democrats have been at odds over whether to extend the additional
$600 a week in jobless benefits, scheduled to run out at the end of
Republicans pointed to May's stronger-than-expected job growth
as evidence workers no longer need expanded unemployment benefits.
Democrats have argued that millions of people remain jobless and
need extended aid to keep paying bills.
Some small businesses are already running through loans from the
federal government's Paycheck Protection Program, which was
designed to help companies keep workers on payrolls.
"Many owners received their loans in April and can no longer
afford to keep workers past June," the National Federation of
Independent Business said.
Jennifer Cumming owns Foundational Concepts, two physical
therapy clinics in Overland Park, Kan., and Kansas City, Mo. She
was able to use the federal small-business loans to rehire
employees this spring after they were furloughed at the onset of
But when the federal funds -- which lasted eight weeks --
expired in mid-June, Ms. Cumming wasn't able to guarantee stable
paychecks for three of the company's 10 employees, who quit as a
result. Ms. Cumming said she didn't plan on immediately replacing
all of them, given the recent climb in coronavirus cases in her
"We want to be smart and not overextend ourselves," she
Write to Sarah Chaney at email@example.com
(END) Dow Jones Newswires
July 02, 2020 05:44 ET (09:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.