By Sarah Chaney
The jobless rate fell to 11.1% in June as the U.S. regained 4.8
million jobs, continuing a labor market rebound from the economic
shock caused by the coronavirus pandemic.
Job growth in June followed May's payroll gain of 2.7 million
and showed people are getting back to work faster than anticipated.
Still, the U.S. labor market is operating with about 15 million
fewer jobs than in February, the month before the pandemic struck
the U.S. economy, and a recent coronavirus rise could hamper the
job market's recovery.
The June unemployment rate was down from 13.3% in May, even
though there were significantly more workers who were accurately
counted as unemployed in June compared with previous surveys during
the pandemic, according to the Labor Department.
The jobless rate is still at historically high levels. Until
March, before the coronavirus drove the U.S. into a deep recession,
the unemployment rate was hovering around a 50-year low of
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, doesn't reflect those recent government-mandated business
closures and related layoffs.
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
Job gains in leisure and hospitality -- a sector that was hard
hit by the coronavirus shutdowns -- accounted for about 40% of
June's employment growth. Restaurants and bars were the main
driver. Those workers are particularly vulnerable to renewed
layoffs because a recent rise in cases in several states is causing
governors to halt or rollback reopening plans.
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.
President Trump celebrated the employment figures. "Our economy
is roaring back," Mr. Trump told reporters at the White House,
adding that he was "really happy."
Mr. Trump said voters should be wary of replacing him in the
November elections, saying that doing so would hurt the economy. He
played down economic threats from the increasing spread of
coronavirus, which has forced states across the South and Southwest
to shut down businesses and recommend wearing masks in public. "The
crisis is being handled," Mr. Trump said.
Employers in sectors such as retail, health care and
manufacturing added jobs in June. Companies recalled workers who
were temporarily laid off due to the pandemic, helping drive down
the number of unemployed Americans on temporary layoff by about 5
million from May to June. Meanwhile, the number who permanently
lost their jobs rose by about 600,000 over that period.
"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
The number of new applications for jobless benefits fell by
55,000 to 1.43 million last week, the Labor Department said in a
separate report Thursday. 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
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
dropped off in places including Texas and Arizona, data from
scheduling and hiring software provider Homebase showed.
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.
"The big picture is this is still an emergency," said Lisa Cook,
an economics professor at Michigan State University. "There are
small businesses and other businesses that are permanently
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 Texas city's tourism
economy because there would be fewer out-of-town guests to dine at
nearby restaurants and sleep in Airbnbs.
Declines in unemployment last month were uneven across racial
groups. The jobless rate for white workers fell 2.3 percentage
points to 10.1% in June. The unemployment rate for Black workers
decreased 1.4 percentage points to 15.4%. The rate for Latino
workers fell below that of Black workers, declining 3.1 percentage
points to 14.5%.
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 would 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 have pointed to 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
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 10:52 ET (14:52 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.