Despite recent spikes in COVID-19 cases, the U.S. labor market exemplified signs of recovery in the June 2020 Jobs Report. Last month, non-farm payrolls added 4.8 million jobs in June, much higher than the +2.9 million expected by economists. As a result, the unemployment rate dropped to 11.1%, which is also better than the predicted rate of 12.4%. Overall, we still have a long way to go before we return to our pre-pandemic state, but we have seen a spark of light in the U.S. labor market for two consecutive months.
June 2020 Jobs Report Overview
The addition of 4.8 million jobs is a massive jump from May’s gain of 2.7 million jobs, marking the most significant single-month increase in U.S. history. “The 4.8 million rise in non-farm payrolls in June provides further confirmation that the initial economic rebound has been far faster than we and most others anticipated,” said Michael Pearce, senior U.S. economist at Capital Economics.
These numbers are a little surprising since jobless claims keep rolling in each week. In another report released by the Department of Labor, U.S. unemployment claims clocked in at 1.427 million. However, this contrast is partly because not every unemployed American is returning to work, even after states and counties continue to open. Thus, many of the 4.8 million jobs are new jobs that have been created over the last month.
The unemployment rate declined by 2.2%, from 13.3% in May to 11.1% last month. The labor force participation rate also saw a nice bump to 61.5%, another strong indication that we are well on our way to recovery. Additionally, the number of temporary layoffs in June fell by 4.8 million to a total of 10.6 million, following last month’s trend.
Where are the job gains at?
Significant employment increases occurred in leisure and hospitality (+2.1 million), retail trade (+740,000), education and health services (+568,000), manufacturing (+356,000), professional and business services (+306,000), construction (+158,000), transportation and warehousing (+99,000), wholesale trade (+68,000), financial activities (+32,000), and government (+33,000). Unfortunately, the mining industry continued to lose jobs (-10,000). Employment in all other services industries increased by +357,000.
Revisions from previous months
Over the last couple of months, non-farm payroll employment was revised. In April, employment was declined by 100,000 from -20.7 million to -20.8 million. However, May’s employment levels saw a positive change of +190,000 from +2.5 million to +2.7 million. With these revisions, employment in April and May combined was +90,000 higher than previously reported.
Employers are hiring again
The last two job reports illustrate that the country is beginning to recover. We are far from our pre-pandemic job gain levels and historic-low unemployment rates, but we are making progress. These numbers show the resiliency of our country and employers across the country. If you are currently on the job market, we have hundreds of opportunities with employers that need talent like you. Check out our job board and find the next step in your career today.
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