Total nonfarm payroll employment increased by 4.8 million in June with the unemployment rate declining to 11.1%, the U.S. Bureau of Labor Statistics (BLS) reported Thursday. Last month’s continued improvements reflect a rebound of economic activity that had been diminished in March and April due to the COVID-19 pandemic and subsequent stay-at-home orders. However, with COVID-19 cases increasing in some areas and more states slowing or reversing their opening plans, concerns remain that the jobs improvements could stall.
Employment in leisure and hospitality rose sharply in June, with notable job gains also occurring in retail trade, education and health services, other services, manufacturing, and professional and business services.
“Today’s jobs report shows that our resilient economy continues to return more people to work, more quickly, than forecast. It is heartening to see employment gains across nearly all demographics,” said Secretary of Labor Eugene Scalia. “The report reflects that we can return millions more Americans to work in the weeks ahead, provided we bear in mind that economic recovery must go hand-in-hand with safe practices and self-discipline.”
The unemployment rate declined last month by 2.2 percentage points, and the number of unemployed declined by 3.2 million to 17.8 million. However, the jobless rate and number of unemployed are still up by 7.6 percentage point and 12 million, respectively, since February.
The number of unemployed people on temporary layoff decreased by 4.8 million last month to 10.6 million, following a 2.7 million decline in May. However, the number of permanent job losers continued to rise, with a boost of 588,000 to 2.9 million last month. The number of unemployed re-entrants to the labor force increased by 711,000 to 2.4 million.
Last month, nonfarm employment was 14.7 million, or 9.6%, lower than February. Employment in leisure and hospitality increased by 2.1 million, accounting for about two-fifths of the gain in total nonfarm employment, according to the BLS. Employment in food services and drinking establishments increased by 1.5 million in June, following a gain of the same magnitude the prior month. However, employment is still down by 3.1 million since February in this category. Employment also rose last month in amusements, gambling, and recreation as well as the accommodation industry.
“The labor market continued its rebound in June, as total nonfarm payroll employment was better than expected, with 4.8 million jobs added, pushing the unemployment rate down to 11%. Notable increases continued in leisure and hospitality. The June jobs report appears to be good news for the economy but labor market improvements are likely to stall out if we don’t get control of the virus,” said First American deputy chief economist Odeta Kushi.“Stay-at-home orders and mandated business closures have disproportionally impacted the services sector, which is why we saw a strong rebound in leisure and hospitality employment in the May and June reports as states began to reopen. Yet, more than 40% of the country is now reversing its plans to reopen, and this could potentially result in another labor market shock.”
In addition, construction employment increased by 158,000 last month, following an increase of 453,000 in May. These gains have accounted for more than half of March and April’s decline. Month-over-month gains were seen in specialty trade contractors, with growth about equal between residential and nonresidential. Job gains were also seen in the construction of buildings.
“Residential construction employment (including specialty trade contractors) grew by 83,000, a smaller gain than last month but a welcome sign nonetheless for an industry grappling with supply constraints,” noted Doug Duncan, chief economist at Fannie Mae.
