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

BREAKING: Reported stabbing at Killer Cove in Harrison

Police chase ran through Agassiz, witnesses say

29-year-old killed in ATV accident on forest service road outside Hope

Jonathan Mayers passed away after an accident up a forest service road past Union Bar Road

Drinking in two city parks to be allowed by Chilliwack council

Crossing and Vedder Park both designated for pilot project that encourages responsible drinking

RCMP charge Langley man in connection with boat collision on Cultus Lake

A 67-year-old man allegedly operated a motor boat that collided with a woman paddling a canoe

‘Do our lives count for less?’: COVID-19 exposes cracks in disability aid

In July, Parliament approved a $600 payment for people with disabilities facing additional expenses during COVID-19

Agreement between province, BC Hydro, First Nation, ends legal fight over Site C

B.C. will work to improve land management and restore traditional place names in areas of cultural significance

VIDEO: B.C. conservation officers free not-so-wily coyote with head stuck in jar

Poor pup was found with a glass jar stuck on its head in Maple Ridge

Fraser Valley Bandits clinch first round bye with win

Bandits defeat Guelph 84-70, advance to the CEBL semifinals on Saturday

B.C. doctors, dentists call on province for mandatory mask rule

Open letter says masks should be worn in indoor public spaces, public transportation or in crowds

Dwindling B.C. bamboo supply leaves Calgary Zoo biologists worried about pandas

Zoo has been trying to send pandas back to China since May

Maple Ridge firefighting camp empowers young women

Camp Ignite to take place at Justice Institute on Sunday, Aug. 9

Facebook launches its new TikTok clone, Instagram Reels

Facebook has a long tradition of cloning competitive services

Most Read