US jobless rate falls more than expected in June; nearly 5 mn jobs created

By Jorge A. Bañales

Washington, Jul 2 (efe-epa).- The United States’ jobless rate surprisingly fell to 11.1 percent in June, a month in which non-farm payroll employment rose by a record 4.8 million, the Labor Department said Thursday.

The unemployment rate has now fallen for two consecutive months despite the ongoing coronavirus crisis, having dropped from 14.7 percent in April to 13.3 percent in May.

In a press conference at the White House, US President Donald Trump said record employment gains were seen last month among African-Americans (+404,000 jobs), Hispanics (+1.5 million jobs) and women (+3 million jobs).

“80 percent of small businesses are now open,” he said. “New business applications have doubled since late March. That’s a number that’s not even thinkable to achieve this early into a pandemic.”

“With all we go through, with all of the trials and tribulations that we read about every night, much of it totally fake news, fortunately … consumer confidence has risen 12 (percentage) points since April … Retail sales surged at an astonishing 18 percent in May; that’s the largest increase in the history of our country,” the president added.

The figures released Thursday by the Labor Department’s Bureau of Labor Statistics (BLS) were well received by investors, with Wall Street’s Dow Jones blue-chip index, the S&P 500 large-cap index and the tech-heavy Nasdaq all up around 1 percent after midday.

The labor figures exceeded the expectations of most economists, who had forecast that 3.3 million jobs would be created and that the unemployment rate would come in at 12.5 percent.

Nearly all of the employment gains occurred in the private sector (up by 4.77 million jobs) in June, a month after 3.2 million private jobs were added. Government employment rose by just 33,000 positions last month after having fallen by 533,000 jobs in May.

The employment numbers come as welcome news for Trump, whose administration was able to boast of the lowest jobless rate in 50 years prior to the pandemic (3.5 percent) but then saw the April unemployment rate soar to 14.7 percent, the highest since the Great Depression of the 1930s.

Many businesses have begun reincorporating laid-off workers since mid-May, although more than 10 million people who have lost their jobs since the crisis began have not yet been rehired.

The number of workers who have permanent lost their jobs rose by 588,000 month-over-month to 2.9 million in June. The amount of people jobless for between 15 weeks and 26 weeks climbed by 825,000 from May to 1.9 million, while the long-term unemployed (those jobless for 27 weeks or more) rose by 227,000 to 1.4 million.

Despite the rapid job gains of the past two months, economists have expressed concern that the recent sharp rise in coronavirus cases in several southern and western states could lead authorities to order fresh stay-at-home orders and closures of non-essential businesses.

Employment in the leisure and hospitality sector rose by 2.1 million in June, accounting for more than 40 percent of the monthly job gains, with a total of 1.5 million jobs added at restaurants and drinking places.

The manufacturing sector, which had added 250,000 jobs in May, saw employment growth of 356,000 positions in June.

Separately Thursday, first-time filings for jobless benefits (a proxy for layoffs) for the week ending June 27 fell slightly from the previous week but still totaled 1.42 million, marking the 15th straight week that initial claims have topped the 1-million mark.

By comparison, an average of around 200,000 initial claims were being filed in the months before the coronavirus crisis began in the US in March.

The four-week moving average of initial jobless claims, which smooths out week-to-week variations, came in at 1.5 million, a decrease of 117,500 from the previous week’s average.

The advance number for seasonally adjusted insured unemployment (also known as continued claims and reported with a one-week lag) during the week ending June 20 came in at 19.3 million, an increase of 59,000 from the previous week’s revised level, the Labor Department said. EFE-EPA

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