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

DFO says the five aggrieved B.C First Nations were consulted on fisheries plan

Nuu-chah-nulth First Nations calls response ‘a sham,’ adding DFO never incorporates their views

Three active COVID-19 cases on Vancouver Island

Since July 24, Central island has had five new cases, North one, South none

COVID-19: Tla-o-qui-aht First Nation asks Tofino businesses for support as emergency funding runs dry

“We need to pay for the work they do. It’s such important work.”

Canada can lead the way to save sharks from extinction, says fisheries expert

“Combined with fishing extraction numbers, sharks experience huge losses in the environment.”

Five Vancouver Island First Nations call out Canada for ‘discriminatory’ food fish practices

West Coast nations say government ignoring court-won right to chinook and coho

Man arrested after stabbing incident at makeshift camp near Vancouver Island mall

RCMP in Parksville report 28-year-old man taken into custody without incident

Canucks ride momentum into NHL playoff series against defending Stanley Cup champs

PREVIEW: Vancouver opens against St. Louis on Wednesday

Pitt Meadows woman gives birth on in-laws’ driveway

Frédérique Gagnon new son is appropriately named after Norse trickster god

Man, 54, charged in connection with fatal attack of Red Deer doctor

Doctor was killed in his walk-in clinic on Monday

UPDATE: Two dead after fishing boat sinks off southern Vancouver Island

Shawnigan Lake-registered Arctic Fox II went down off Cape Flattery, west of Victoria

Landlord takes front door, windows after single B.C. mom late with rent

Maple Ridge mom gets help from community generosity and government

VIDEO: B.C. community rallies to save snared eagle

Revelstoke climber scales tree to save the raptor

42 more people test positive for COVID-19 in B.C.

The province has recorded no new deaths in recent days

Most Read