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The economy added 4.8 million jobs in June

But job creation may slow considerably as coronavirus spikes reverse some reopenings

Photo (c) Yuri_Arcurs - Getty Images
On the heels of a shocking increase in jobs in May, the Labor Department reports that the U.S. economy added 4.8 million jobs in June as businesses began to reopen. The unemployment rate fell to 11.1 percent.

The number of unemployed people who were on temporary layoffs fell by 4.8 million to 10.6 million. That good news, however, was offset by a rising number of people whose jobs are now considered permanently eliminated. That number rose by 588,000 to 2.9 million in June. 

“This rebound in business activity accelerated in June,” said William Beach, commissioner of the Bureau of Labor Statistics. “Nevertheless, total nonfarm employment is 14.7 million, or 9.6 

percent lower than in February.” Furthermore, although unemployment continued to fall in June, the unemployment rate and the number of unemployed people are up by 7.6 percentage points and 12.0 million, respectively, since February.”

Leisure and hospitality lead the way

As it did in May, the leisure and hospitality sector led June’s job creation as more of these types of businesses reopened. The sector added 2.1 million jobs, accounting for about two-fifths of the gain in total nonfarm employment. 

Employment in food services and drinking places rose by 1.5 million, following a similar gain in May. Even with these gains, however, employment in food services and bars is down by 3.1 million since February -- just before the pandemic.

Analysts say the June numbers need to be taken with a rather large grain of salt because some of those jobs that were created in early June may have disappeared again, or may do so in the near future. With the recent spike in coronavirus (COVID-19) cases some bars have closed again in Texas and California. Other states may be considering a similar move.

In New York, Gov. Andrew Cuomo has rescinded an order that would have allowed indoor dining at restaurants, starting this week. Other states where the virus remains in check are reportedly rethinking their reopening plans as officials watch what’s happening in the South and Southwest.

Retail job gains

The same could be true, to a lesser extent, in the retail sector. Retailers added 740,000 positions last month following a 372,000 job gain in May. However, the sector lost 2.4 million jobs in March and April combined, so the industry is operating with 1.3 million fewer jobs than it did in February.

Meanwhile, some retailers are rethinking their reopening plans as well. Apple has added dozens of stores to its list of Apple Stores that are temporarily closed, and McDonald’s has pushed back its dining room reopening plans by three weeks.

In nearly every category, job creation rose but still has a long way to go before reaching pre-pandemic levels. For example, professional and business services added 306,000 jobs in June, but the government notes that employment is 1.8 million below its February level.

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