The June jobs report revealed 4.8 million jobs were added last month with an unemployment rate of 11.1 percent. Cheryl Casone of FOX Business with more.
The US economy added a staggering 4.8 million jobs last month, according to data from the Bureau of Labor Statistics, but experts warn that next month may show a much less optimistic picture.
The 4.8 million in June accumulate on the 2.5 million added in May. The government attributed the historic increase in June to “the continued resumption of economic activity that had slowed in March and April due to the coronavirus pandemic (COVID-19) and efforts to contain it.”
However, the report only takes into account the data until the middle of the month. Since then, coronavirus cases have skyrocketed in every state in the United States, prompting states to pause and even reverse plans to reopen.
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A resurgence in cases may begin to erase the economic gains that we have begun to see.
“I suspect that we will see a slowdown or, indeed, a movement in a direction that no one is going to be particularly [happy] with, “Brian Marks, a tenured professor at Pompea College of Business at the University of New Haven, told FOX Business, adding that the unemployment figures” will probably look worse as we get closer to August. “
That is in part due to another wave of layoffs that is likely to result from putting those phased reopening plans on hold.
“We are confident of another economic impact for many people,” Dr. Anthony Harris, WorkCare director of innovation and medical director, told FOX Business. “It is a double whammy, unfortunately.”
While states like Texas and California, where cases are increasing, are understandably reducing activity, an increase in cases is also causing concern in other areas that fear a resurgence.
New York City and New Jersey, for example, have postponed indoor meal plans. And that uncertainty is likely to prevent employers from increasing hiring too quickly.
“Any uncertainty that reduces the possibility of spending simply seeps through the entire economy,” said Marks.
Harris said companies are “prudently” taking a wait-and-see approach.
Both Harris and Marks expect these less positive trends to be reflected in the July employment report.
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And while the unemployment rate fell to 11.1 percent in June, from 13.3 percent the previous month, those statistics also can’t show the full picture.
The Bureau of Labor Statistics added a footnote at the bottom of its recent reports that there could be a misclassification of people who were absent from their jobs.
The misclassification indicates that the overall unemployment rate would have been 16.3 percent in May, instead of 13.3 percent.
In June, the BLS said it estimates the misclassification may have added up to 1 percentage point to the unemployment number.
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New weekly unemployment claims continue to come in at around 1.5 million, with more than 50 million new claims filed since mid-March. Applications have exceeded one million for 15 consecutive weeks.
Jobs added to the workforce in June marked the highest individual monthly gain in history. However, even with those staggering gains, the United States economy has only made up about a third of pandemic-related job losses, according to the Associated Press.
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