4,8 million new jobs: June US unemployment decline surpasses all expectations
The US unemployment rate fell to 11,1% in June, as businesses shut down by a pandemic earlier this year again hired millions of workers. Writes about this Fox Business.
In a report released Thursday, July 2, the Labor Department said employers added 4,8 million jobs in June, the largest increase on record. Economists had expected the report to show: unemployment fell to 12,3% and employers added 3 million jobs.
Nevertheless, the country's unemployment rate rose by 7,6 percentage points compared with the beginning of the year, when it reached a half-century low. There are now 12 million more unemployed Americans than in February.
During June, each state focused on the restoration of its economy. However, it is expected that the unemployment rate, which is still at its highest level in recent decades, will remain high as the guidelines for social distance remain in force against the backdrop of new cases of COVID-19.
New cases have exceeded 50 for the first time this week. Arizona, Florida, Texas, and California are among the states with a surge in infections. If the outbreak intensifies and forces enterprises to shut down again, then, according to economists, the consequences could be dire.
Since the report was prepared in mid-June, it did not record recent closings in some states that have seen a spike in the number of infected. Disney has postponed its July opening of its California parks, Apple has closed 32 stores in five states again, and Macy's announced it will cut 3900 corporate jobs - roughly 3% of the total workforce. Texas Gov. Greg Abbott paused plans to reopen the state - he issued a decree to close all bars in the state and cut the capacity of restaurants by 50%.
“With surging COVID-19 rates hitting new highs last week, they are likely to outpace the economy in the coming months as a second wave could shut down millions of US small businesses again and freeze hiring,” said Andrew Chamberlain, chief economist at Glassdoor. ...
Nonetheless, he stressed, the report, which exceeded all expectations, provided “a powerful signal of how quickly US job growth can resume and how quickly business can resume after the country finally takes control of the coronavirus is a reason for optimism in the coming months. "
The Department of Labor weekly data on applications for benefits showed that another 1,43 million Americans applied for unemployment benefits last week, meaning layoffs continue to grow. The number of Americans who have received assistance for more than two weeks has actually increased by 59 to 000 million.
“The number of weekly jobless claims remains alarmingly high, barely falling from the previous week,” said Robert Frick, economist at the Federal Credit Union of the Navy. "Yes, people are hired in industries such as leisure and hospitality, but many are fired in other industries, as well as in government and local government."
Indeed, leisure and hospitality once again accounted for the bulk of the jobs created last month, with more than 2 million new jobs. About 1,48 million of those jobs were added by the food sector - one of the worst hit by the pandemic: states ordered restaurants and bars to close, and Americans stayed home, while the hotel business hired about 238 people.
Retail hiring increased by 740 and manufacturing by 000. The education and health sector hired 356 people.
But states that face significant budget deficits as a result of the recession caused by the virus have lost 25 jobs.
The overall unemployment rate was slightly underestimated due to a mistake in the classification of the Bureau of Labor Statistics. Persons who were temporarily out of work as a result of closures caused by the virus were nevertheless classified as employed in the report, even if they did not work, and should be considered unemployed.
The agency said the discrepancy "narrowed significantly" in June. During a press conference, US President Donald Trump called the announcement of the unemployment cut "impressive news."
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