Image: The Canadian Press

Image: The Canadian Press

US unemployment falls to 11%, but new shutdowns are underway

President Donald Trump said the jobs report shows the economy is “roaring back”

U.S. unemployment fell to 11.1% in June as the economy added a solid 4.8 million jobs, the government reported Thursday. But the job-market recovery may already be faltering because of a new round of closings and layoffs triggered by a resurgence of the coronavirus.

While the jobless rate was down from 13.3% in May, it is still at a Depression-era level. And the data was gathered during the second week of June, just before a number of states began to reverse or suspend the reopenings of their economies to try to beat back the virus.

“This is a bit of a dated snapshot at this point,” said Jesse Edgerton, an economist at J.P. Morgan Chase.

The news came as the number of confirmed infections per day in the U.S. soared to an all-time high of 50,700, more than doubling over the past month, according to the count kept by Johns Hopkins University.

The spike, centred primarily in the South and West, has led states such as California, Texas, Arizona and Florida to re-close or otherwise clamp down again on bars, restaurants, movie theatres, beaches and swimming pools, throwing some workers out of a job for a second time.

President Donald Trump said the jobs report shows the economy is “roaring back,” though he acknowledged there are still areas where “we’re putting out the flames” of the virus.

Democratic presidential candidate Joe Biden responded, “Just like last month, President Trump has spiked the ball and made this about him. He doesn’t seem to realize he’s not even on the 50-yard line.”

Economists expect the recovery to take longer than Trump’s optimistic projections, with the unemployment rate likely to be near double-digit levels by year’s end.

“Even as we move into the second half of the year, a large number of people will still be looking for work,” said Eric Winograd, senior U.S. economist at asset manager AllianceBernstein.

The shutdowns over the past two weeks will be reflected in the July unemployment report, to be released in early August.

While the job market improved in June for a second straight month, the Labor Department report showed that the U.S. has recouped only about one-third of the colossal 22 million jobs lost during the lockdowns this spring.

Layoffs are still running high: The number of Americans who applied for unemployment benefits fell only slightly last week to 1.4 million, according to the government. Though the weekly figure has declined steadily since peaking in March, it is still extraordinarily large by historic standards.

And the total number of people drawing jobless benefits remains at a sizable 19 million.

U.S. job growth in June was driven mainly by companies recalling workers who had been laid off during the widespread business shutdowns across the country.

In an ominous trend contained in the Labor Department report, the number of Americans who said they had lost their jobs permanently rose by 600,000 last month to nearly 2.9 million.

Many businesses, particularly small ones, are shutting down for good even though the lockdowns have largely been lifted.

Erik Hurst, an economics professor at the University of Chicago, said many restaurants, bars and gyms can’t survive by operating at half-capacity, and customers are going to be cautious until there is a vaccine.

“We don’t want to get our hair cut as much as we used to,” Hurst said. “We don’t want to go out to eat as much as we used to.”

Fred Wellman’s five employees are getting their final paychecks Friday as he closes down his public relations firm, ScoutComms. He was able to get a small-business loan from the government, but it wasn’t enough.

He usually drums up most of his business at conferences, seminars and other in-person events. But “if people aren’t meeting in person, if people aren’t holding events, you don’t get a chance to mingle,” he said.

The job gains of the past two months have partly resulted from unprecedented levels of government spending, including $1,200 relief checks, more than $500 billion in grants to small businesses, and an extra $600 a week in unemployment benefits.

Those payments enabled millions of Americans to cover the rent and other bills. Yet those programs are expiring or tailing off. The additional $600 in unemployment ends July 31.

“We could see a huge cliff,” said Julia Pollak, labour economist at ZipRecruiter. “Those expanded benefits will expire before new hiring has really picked up.”

Congress is debating another relief package. Treasury Secretary Steven Mnuchin said Thursday he supports something that is “much more targeted” to businesses that need it.

Hotels, restaurants, bars and casinos added 2.1 million jobs last month, the most of any industry. Retailers gained 740,000.

While unemployment fell in June for all groups, it dropped faster for whites than for Blacks or Latinos. The rate among white people was 10.1%. Black unemployment fell to 15.4% from 16.8%. Among Latinos, unemployment dropped to 14.5% from 17.6%.

The number of laid-off workers seeking unemployment benefits rose last week in Texas, Arizona and Tennessee. It fell in California, but was near 280,000. That’s more than the number of people who were seeking jobless benefits in the entire country before the outbreak took hold in March.

READ MORE: Trump plans huge July 4 fireworks show despite DC’s concerns

READ MORE: More than 50,000 Coronavirus cases reported per day in US

Christopher Rugaber, The Associated Press

Like us on Facebook and follow us on Twitter.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A Nanaimo RCMP officer is recovering after his patrol car was hit by another vehicle at an intersection on Monday, May 10. (Photo courtesy Julia Rose)
Nanaimo RCMP vehicle broad-sided in crash at Harewood intersection

Police officer recovering at home following collision Monday

A scene from the Schoolhouse Squat from October 2018, where Alliance Against Displacement members and supporters occupied the Rutherford Elementary School site, advocating for people experiencing homelessness. (News Bulletin file)
Two more involved in ‘Schoolhouse Squat’ sentenced in Nanaimo court

Ivan Donald Drury, Tingchun (Listen) Chen get conditional discharges in provincial court in Nanaimo

Gabriola Island’s Kerplunks – Aaron Cadwaladr, Dinah D, Phil Wipper and Jojo Hallett (from left) – perform live from the Port Theatre on May 15. (Photo courtesy Lance Sullivan/Concept Photography)
Nanaimo children’s group the Kerplunks hold first concert in over a year

TheatreOne and the Port Theatre present ‘Upstream with the Kerplunks’

Business owner Jeff Ross outside his shop Gold Silver Guy in Qualicum Beach on May 10. (Mandy Moraes photo)
Gold Silver Guy owner finds Qualicum shop in shambles after break-in and theft

RCMP investigating after door smashed, showcases shattered and inventory stolen

Nanaimo RCMP were looking for a 57-year-old woman who missed a work appointment and has not been seen since May 3. She has since been found safe and sound, say police. (Photo submitted)
UPDATE: Nanaimo woman who hadn’t been seen in a week has been found safe

57-year-old has been away from the boat where she resides on Stewart Avenue

Business owner Jeff Ross outside his shop Gold Silver Guy in Qualicum Beach on May 10. (Mandy Moraes photo)
Gold Silver Guy owner finds Qualicum shop in shambles after break-in and theft

RCMP investigating after door smashed, showcases shattered and inventory stolen

Fraser Health is using ‘targeted’ vaccination clinics in high-risk areas of the Lower Mainland. (Fraser Health photo)
B.C.’s COVID-19 decrease continues, 515 new cases Tuesday

426 seriously ill people in hospital, up from 415 Monday

People are asked to support the Walk for Alzheimer’s by setting a personal walking or fitness challenge throughout May, while fundraising to support Alzheimer Society of B.C. programs and services. (Stock photo)
Nanaimo residents asked to ‘walk their own way’ for Alzheimer’s

Month-long self-paced fitness challenge supports Alzheimer Society of B.C.

The Village on Third in Nanaimo won the Judges’ Choice award as top overall entry at the Vancouver Island Real Estate Board Commercial Building Awards. (Photo submitted)
Nanaimo mixed-use building wins top prize at commercial building awards

Village on Third was Judges’ Choice winner at VIREB Commercial Building Awards

Nanaimo painter Eileen Williamson presents ‘A Little of This….A Little of That’ at Art 10 Gallery until the end of May. (Josef Jacobson/News Bulletin)
Nanaimo artist unveils new body of work after rediscovering motivation

Eileen Williamson presents ‘A Little of This … A Little of That’ at Art 10 Gallery

Next week Nanaimo singer Laura Kelsey is releasing her new single A Foolish Thing and its accompanying music video. (Video still courtesy Greg Nuspel)
Nanaimo singer joined by wolf, dancers in new music video

‘A Foolish Thing’ is Laura Kelsey’s first professionally made single in seven years

Keith MacIntyre - BC Libertarian
Penticton’s Keith MacIntyre new leader of the B.C. Libertarian Party

The Penticton businessman was voted in by members of the party on May 8

RCMP are searching for Philip Toner, who is a 'person of interest' in the investigation of a suspicious death in Kootenay National Park last week. Photo courtesy BC RCMP.
Man sought in suspicious Kootenay death found in Lake Country

Philip Toner is a person of interest in the death of Brenda Ware

Vernon North Okanagan RCMP reported to 287 mental health calls between Jan. 1, 2021, and May 1. (Black Press files)
‘It’s not the police’s responsibility to deal with mental health calls’: Vernon RCMP

RCMP remind public to take care of mental health and well-being, while better solutions are sought

Most Read