4.8 Million Jobs Added in June, but Clouds Grow Over Economy - The New York Times

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Employers brought back millions more workers in June as businesses began to reopen across the country. But the recent surge in coronavirus cases is threatening to stall the economic recovery long before it has reached most of the people who lost their jobs.

U.S. payrolls grew by 4.8 million in June, the Labor Department said Thursday. It was the second month of strong gains after April’s huge losses, when businesses laid off or furloughed tens of millions of workers as the pandemic put a large swath of economic activity on ice.

The job growth surpassed economists’ forecasts, and it was broad-based, cutting across industries and demographic groups.

But the thaw is far from complete. There were still nearly 15 million fewer jobs in June than in February, before the pandemic forced businesses to close. The unemployment rate fell to 11.1 percent in June, down from a peak of 14.7 percent in April but still higher than in any previous period since World War II. The rate would have been about one percentage point higher, the Labor Department said, had it not been for persistent data-collection problems.

Unemployment rate since 1948

By Ella Koeze·Unemployment rates are seasonally adjusted. The government began collecting standardized unemployment statistics in 1948.·Source: Bureau of Labor Statistics

In an appearance at the White House on Thursday morning, President Trump hailed the numbers as “spectacular news for American workers and American families and for our country as a whole.”

The monthly jobs data was collected in mid-June, before coronavirus cases began to spike in Arizona, Florida and several other states. More timely data, also released by the Labor Department on Thursday morning, showed that 1.4 million Americans filed new claims for state unemployment benefits last week — the 15th straight week that the figure exceeded one million — and 840,000 others filed for benefits under the federal Pandemic Unemployment Assistance program.

Economists fear that layoffs could accelerate now that states have begun ordering some businesses to close again. And they warn of another looming threat: the expiration of government assistance, in particular the enhanced unemployment benefits providing an extra $600 per week to laid-off workers. Without congressional action, those benefits will cease at the end of this month, potentially eliminating a key source of support not just for the workers but for the broader economy as well.

“We’re in a very deep hole, and we just set ourselves back again,” said Diane Swonk, chief economist at the accounting firm Grant Thornton. “It’s difficult to climb out of that hole.”

By Ella Koeze·Pandemic Unemployment Assistance extends eligibility to some workers who would not otherwise be able to apply for unemployment benefits, such as part-time and self-employed workers. Regular claims are seasonally adjusted but P.U.A. claims are not.·Source: Labor Department

The H.Wood Group, which operates a dozen bars, restaurants and nightclubs in the Los Angeles area, had just begun to dig out of that hole when the latest round of shutdown orders hit. The company spent weeks figuring out how to operate safely, installing plexiglass dividers between banquettes, eliminating reusable menus and adopting policies like temperature checks at the door and mandatory masks.

Latest Updates: Economy

Updated 2020-07-02T20:30:00.723Z

• The U.S. economy added 4.8 million jobs last month, but new clouds are gathering.
• People of color continue to have a greater chance of being unemployed.
• Markets climb for fourth day as hiring beats expectations.

See more updates

More live coverage: Global

In June, that work appeared ready to pay off: Two of the company’s restaurants reopened, and three bars were set to reopen this week. Customers, eager to eat out after weeks of lockdown, snapped up reservations.

“The first two nights were a little weird,” as people adjusted to masks, face shields and temperature checks, said John Terzian, the company’s co-owner. “But after Night 3, I think people settled in, and honestly it felt perfect.”

Then on Sunday, Gov. Gavin Newsom ordered Los Angeles County bars to shut down; on Wednesday, he ordered restaurants to suspend dine-in service as well. Mr. Terzian, who had brought back roughly half his 400-person work force and was on track to bring back the rest, instead had to start telling people they were out of work again.

And while H.Wood is financially stable, he said, he will be slower to reopen next time, lest the authorities pull the rug out from under him.

New shutdowns forced John Terzian, co-owner of a group of bars, restaurants and nightclubs in the Los Angeles area, to let go some employees he was just bringing back. Credit...Rozette Rago for The New York Times

“I think we would be really hesitant,” he said. “Staying shut we understood, but reopening and reshutting is just wrong.”

Economists say stories like Mr. Terzian’s drive home a central fact of the crisis: The economy can’t truly begin to recover until the pandemic is under control.

“The virus drives the economics,” said Betsey Stevenson, a member of the Council of Economic Advisers under President Barack Obama who is now at the University of Michigan. If cases continue to rise, as health officials warn, “we’re not going to have people going back to work,” Ms. Stevenson added.

“In fact, we’re going to see more people staying home,” she said.

Total employment has grown the past two months because companies have begun recalling temporarily laid-off workers. But layoffs have continued as the economic effects of the pandemic ripple through the economy, reaching businesses and industries that were spared earlier.

The number of people reporting they had permanently lost their jobs rose in June even as the number of workers on temporary layoff fell sharply for the second consecutive month. And the share of Americans out of a job for 14 weeks or less fell in June, while the share unemployed longer continued to rise — another sign that while short-term job losses are abating, more enduring damage lingers.

“We’re going on four months now,” said Olugbenga Ajilore, a senior economist at the Center for American Progress, a progressive group. “There’s only so long that these businesses can hold out before it just doesn’t become feasible.”

The rebound in jobs has not been shared equally across groups. The unemployment rate for white workers has fallen more than four percentage points over the past two months, to 10.1 percent. For Black workers, the rate has fallen just over one point, to 15.4 percent, and the rate for Black men actually rose in June. Asian workers, too, have seen only small gains. Latinos, hit particularly hard when the pandemic shut down much of the service sector, have had a larger drop in unemployment but their jobless rate remains elevated at 14.5 percent.

The good news is that the strong job gains in May and June suggest that the permanent economic damage so far has been relatively limited, in part because of the trillions of dollars of emergency spending authorized by Congress. June’s gains were concentrated in industries like restaurants and retail that were battered in the first phase of the pandemic, but construction, manufacturing and professional services brought back workers as well.

Industries are rebounding, but none have fully recovered

Cumulative change in jobs since June 2016, by industry

By Ella Koeze·Data is seasonally adjusted.·Source: Bureau of Labor Statistics

Assessing the scope of the pandemic’s nationwide economic damage has proved difficult, with varying estimates of the number of people out of work. Some 30 million were collecting either state or federal unemployment benefits as of mid-June, for example, a figure roughly double the 15 million payroll jobs lost since March.

The Coronavirus Outbreak

• Frequently Asked Questions and Advice

  Updated June 30, 2020

  • What are the symptoms of coronavirus?

    Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

  • What’s the best material for a mask?

    Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.

  • Is it harder to exercise while wearing a mask?

    A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

  • I’ve heard about a treatment called dexamethasone. Does it work?

    The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

  • What is pandemic paid leave?

    The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

  • Does asymptomatic transmission of Covid-19 happen?

    So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

  • What’s the risk of catching coronavirus from a surface?

    Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

  • How does blood type influence coronavirus?

    A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

  • How many people have lost their jobs due to coronavirus in the U.S.?

    The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

  • How can I protect myself while flying?

    If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

  • What should I do if I feel sick?

    If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.

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Economists say the gap is partly explained by differences in what the two sources measure: The monthly payroll figures include only employees, not independent contractors and self-employed workers, who can receive federal unemployment benefits under the emergency programs created by Congress. But unemployment offices have also been troubled by backlogs and data-collection issues, and some states say they have been double-counting people filing for federal benefits. A rough reconciliation of the various sources suggests that roughly 25 million people were still out of work because of the virus in mid-June.

Michael Gapen, chief U.S. economist at Barclays, said that whatever the caveats, Thursday’s report was an encouraging sign that the job market was gaining ground before coronavirus cases began to surge again.

“It was a very strong month in the labor market, and the reopening of state economies has led to sizable re-employment,” he said.

Hand & Stone, a national chain of massage studios and facial spas, survived the shutdown more or less intact. By Monday, 420 of its 465 locations had reopened, with 35 more expected to do so by the end of this month. Only a handful of locations have closed permanently. And about 70 percent of members continued paying monthly dues during the shutdown, banking massages for the future rather than canceling their contracts.

Todd Leff, the company’s chief executive, said that so far, at least, customers seemed comfortable going back, in part because of strict safety procedures the company had put in place. Sales at open locations are about 22 percent below where they were a year ago, and close to 80 percent of workers at those locations are back on the job. But Mr. Leff said he was still cautious about the longer-run outlook.

“I see a quicker recovery than I think others are projecting and, at least in my industry, less businesses closing permanently,” he said. “But if it goes another 60 days, that could change.”

With so much uncertainty, many employers are remaining cautious. Nearly 150,000 of the positions created in June were temporary jobs.

“We’re seeing hesitancy on the part of employers to make permanent job offers,” said Amy Glaser, a senior vice president at the staffing firm Adecco.

For those still out of work, the job market remains daunting, particularly for those laid off early in the pandemic, who have now been out of work for months. Juliana Jacobs was let go as a designer of women’s tops at New York & Company in late April and has seen scant openings since then.

Juliana Jacobs has been unable to find work since New York & Company laid her off in April. Credit...Jackie Molloy for The New York Times

“Most of my friends in design have been laid off or furloughed,” she said. “I know very few who are working or have been brought back.”

Ms. Jacobs, who lives in New York City, has taken the time to update her LinkedIn profile, along with her portfolio and résumé. She applied for unemployment benefits in late April but hasn’t been able to get through after her file was marked “pending” on the New York State Department of Labor website.

“There really isn’t anything out there right now,” she said. “Most businesses are either just beginning to reopen or reopening with a reduced staff.”

Jeanna Smialek contributed reporting.

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