Economy

US Unemployment Rate Drops To 11 Pct; Jobless Claims Fall To 1.4M

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The U.S. economy added a record 4.8 million nonfarm jobs in June and the unemployment rate fell to a lower-than-expected 11.1 percent, the U.S. Labor Department reported Thursday (July 2). Meanwhile, the number of Americans who filed jobless claims dropped in the latest week, but still topped 1.4 million.

“These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed in March and April due to the coronavirus pandemic and efforts to contain it,” the Bureau of Labor Statistics said in releasing the numbers.

Analysts had only expected the U.S. economy to add 2.9 million jobs, with the unemployment rate dropped to 12.4 percent from May’s post-Depression record of 13.3 percent. But the Labor Department found big June job gains in the leisure and hospitality sector, which COVID-19 shutdowns had previously hit hard. The sector saw jobs rise in June by 2.1 million, or two-fifths of the total nonfarm employment gains.

Other rebounding sectors included retail, education and health services, other services, manufacturing and professional and business services. For instance, employment in food services and bars rose by 1.5 million last month following a similar hike in May. Retail jobs also rose by 740,000 in June after a 372,000 May gain.

But a closer look at the numbers reveals COVID-19 continues to take a toll on the nation’s workforce. For example, employment in food services and drinking places is still down by 3.1 million jobs when compared to February, while the retail sector has lost 1.3 million positions over the same period.

The BLS also reported Thursday that initial claims for unemployment benefits totaled 1,427,000 in the week ended June 27 — down 55,000 from the previous week’s revised 1,482,000 but still higher than the 1.35 million analysts had expected.

The largest increases in initial claims for the week ending June 20 were in California (43,070), Maryland (9,099), Florida (7,535), New Jersey (6,589) and Indiana (5,314). The largest decreases were in Oklahoma (26,166), Kentucky (12,804), Oregon (8,371), Georgia (6,272) and New York (6,119).

While initial jobless claims nationwide have fallen for 13 consecutive weeks, more than 48 million Americans have filed for unemployment since the pandemic hit the country.

Mark Hamrick, senior economic analyst at Bankrate.com, said it’s a welcome sign to see new jobless claims and continuing claims decline, but noted that they still remain extremely high and tell a story of continued stress for the country.

“With nearly 5 million jobs added in June, the economy continues to heal, but remains hobbled from the COVID-19 pandemic and related restrictions,” he said. “Leisure and hospitality, including bars and restaurants, as well as retail had led the way down — and are leading the way back up.”

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