- Payroll employment rose 4.8 million in June – still down 14.7 million from February
- The unemployment rate fell to 11.1
- Questions about the pace of further improvement given resurgence in virus spread
The monthly job gain in June was easily the largest on record, and built on a 2.7 million increase in May. The initial bounce-back in employment has been quicker than feared by most even a month or two ago. But the two-month increase in May/June still only retraced about a third of total losses over March and April. The unemployment rate fell to 11.1% from 13.3% in May albeit holding at an extremely high level. The drop was largely accounted for by a decline in temporary unemployment as some businesses reopened but the number of people on permanent layoff actually increased by almost 600k. And alternative measures of labour market underutilization like the U6 rate (unemployment + those who want a job but aren’t looking + involuntary part-time workers) is still up almost 11 percentage points relative to a year ago.
Other measures of economic activity have also strengthened in June, not enough to prevent an unprecedented decline in economic activity in Q2, but also clearly suggesting that the end of the quarter was a lot less bad than the beginning. The bigger question at the moment remains how much the June improvement in economic numbers can be sustained given the resurgence in virus spread in some regions.
