Image: The Canadian Press

Image: The Canadian Press

US unemployment falls to 11%, but new shutdowns are underway

President Donald Trump said the jobs report shows the economy is “roaring back”

U.S. unemployment fell to 11.1% in June as the economy added a solid 4.8 million jobs, the government reported Thursday. But the job-market recovery may already be faltering because of a new round of closings and layoffs triggered by a resurgence of the coronavirus.

While the jobless rate was down from 13.3% in May, it is still at a Depression-era level. And the data was gathered during the second week of June, just before a number of states began to reverse or suspend the reopenings of their economies to try to beat back the virus.

“This is a bit of a dated snapshot at this point,” said Jesse Edgerton, an economist at J.P. Morgan Chase.

The news came as the number of confirmed infections per day in the U.S. soared to an all-time high of 50,700, more than doubling over the past month, according to the count kept by Johns Hopkins University.

The spike, centred primarily in the South and West, has led states such as California, Texas, Arizona and Florida to re-close or otherwise clamp down again on bars, restaurants, movie theatres, beaches and swimming pools, throwing some workers out of a job for a second time.

President Donald Trump said the jobs report shows the economy is “roaring back,” though he acknowledged there are still areas where “we’re putting out the flames” of the virus.

Democratic presidential candidate Joe Biden responded, “Just like last month, President Trump has spiked the ball and made this about him. He doesn’t seem to realize he’s not even on the 50-yard line.”

Economists expect the recovery to take longer than Trump’s optimistic projections, with the unemployment rate likely to be near double-digit levels by year’s end.

“Even as we move into the second half of the year, a large number of people will still be looking for work,” said Eric Winograd, senior U.S. economist at asset manager AllianceBernstein.

The shutdowns over the past two weeks will be reflected in the July unemployment report, to be released in early August.

While the job market improved in June for a second straight month, the Labor Department report showed that the U.S. has recouped only about one-third of the colossal 22 million jobs lost during the lockdowns this spring.

Layoffs are still running high: The number of Americans who applied for unemployment benefits fell only slightly last week to 1.4 million, according to the government. Though the weekly figure has declined steadily since peaking in March, it is still extraordinarily large by historic standards.

And the total number of people drawing jobless benefits remains at a sizable 19 million.

U.S. job growth in June was driven mainly by companies recalling workers who had been laid off during the widespread business shutdowns across the country.

In an ominous trend contained in the Labor Department report, the number of Americans who said they had lost their jobs permanently rose by 600,000 last month to nearly 2.9 million.

Many businesses, particularly small ones, are shutting down for good even though the lockdowns have largely been lifted.

Erik Hurst, an economics professor at the University of Chicago, said many restaurants, bars and gyms can’t survive by operating at half-capacity, and customers are going to be cautious until there is a vaccine.

“We don’t want to get our hair cut as much as we used to,” Hurst said. “We don’t want to go out to eat as much as we used to.”

Fred Wellman’s five employees are getting their final paychecks Friday as he closes down his public relations firm, ScoutComms. He was able to get a small-business loan from the government, but it wasn’t enough.

He usually drums up most of his business at conferences, seminars and other in-person events. But “if people aren’t meeting in person, if people aren’t holding events, you don’t get a chance to mingle,” he said.

The job gains of the past two months have partly resulted from unprecedented levels of government spending, including $1,200 relief checks, more than $500 billion in grants to small businesses, and an extra $600 a week in unemployment benefits.

Those payments enabled millions of Americans to cover the rent and other bills. Yet those programs are expiring or tailing off. The additional $600 in unemployment ends July 31.

“We could see a huge cliff,” said Julia Pollak, labour economist at ZipRecruiter. “Those expanded benefits will expire before new hiring has really picked up.”

Congress is debating another relief package. Treasury Secretary Steven Mnuchin said Thursday he supports something that is “much more targeted” to businesses that need it.

Hotels, restaurants, bars and casinos added 2.1 million jobs last month, the most of any industry. Retailers gained 740,000.

While unemployment fell in June for all groups, it dropped faster for whites than for Blacks or Latinos. The rate among white people was 10.1%. Black unemployment fell to 15.4% from 16.8%. Among Latinos, unemployment dropped to 14.5% from 17.6%.

The number of laid-off workers seeking unemployment benefits rose last week in Texas, Arizona and Tennessee. It fell in California, but was near 280,000. That’s more than the number of people who were seeking jobless benefits in the entire country before the outbreak took hold in March.

READ MORE: Trump plans huge July 4 fireworks show despite DC’s concerns

READ MORE: More than 50,000 Coronavirus cases reported per day in US

Christopher Rugaber, The Associated Press

Like us on Facebook and follow us on Twitter.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Marcus Golczyk, with Taco Monster, hands food to a customer during Food Truck Drive and Dash in the Westerner Park parking lot in Red Deer Friday afternoon. The drive-thru event will run every Thursday from 4-7 p.m. and Friday from 11 a.m. to 2 p.m. through June. Photo by SEAN MCINTOSH/Advocate staff
Food Truck Fridays, Food Truck Drive and Dash return in Red Deer

Red Deerians are able to take in a drive-thru food truck experience… Continue reading

Don and Gloria Moore, of Red Deer, are set to celebrate their 70th anniversary later this month. (Contributed photo)
Red Deer couple to celebrate 70th anniversary

Red Deer couple Don and Gloria Moore are set to celebrate their… Continue reading

Chris Scott, owner of The Whistle Stop Cafe, was put in handcuffs after an anti-restriction protest Saturday in the parking lot of the business. (Screenshot via The Whistle Stop Facebook page)
UPDATE: Central Alberta cafe owner arrested after anti-restriction protest

The owner of a central Alberta cafe, which was the site of… Continue reading

Alberta has 1,910 active cases of COVID-19 as of Wednesday. Red Deer is reporting five active cases, with 108 recovered. (File photo)
Red Deer now has 911 active COVID-19 cases

Central zone has 2,917 active cases

Red Deer Regional Hospital Centre's expansion project is still a high priority, says Alberta Infrastructure Minister Prasad Panda. (File photo by Advocate staff)
Red Deer hospital ICU admissions stable, but rising, says surgeon

The Red Deer Regional Hospital Centre’s intensive care unit is in better… Continue reading

FILE - A firefighter wears a mask as he drives his truck. THE CANADIAN PRESS/Jonathan Hayward, File
VIDEO: Flames rip through Edmonton-area seniors complex, but no fatalities

ST. ALBERT, Alta. — Fire has destroyed part of a retirement complex… Continue reading

A caribou grazes on Baffin Island in a 2008 file photo. A last-ditch attempt to save some of Canada's vanishing caribou herds is a step closer after a scientific review panel's approval of a plan to permanently pen some animals and breed them to repopulate other herds. THE CANADIAN PRESS/AP-Kike Calvo via AP Images
Parks Canada captive caribou breeding proposal gets OK from scientific review panel

JASPER, Alta. — A last-ditch attempt to save some of Canada’s vanishing… Continue reading

The smouldering remains of houses in Slave Lake, Alta., are seen in a May 16, 2011, file photo. The wildfire that is devastating large swaths of the northern Alberta city of Fort McMurray comes just five years after another blaze destroyed 400 buildings and left 2,000 people homeless in Slave Lake, Alberta. THE CANADIAN PRESS/Ian Jackson
Ten years later: Five things to know about the Slave Lake wildfire

A wildfire burned about one-third of Slave Lake in northern Alberta in… Continue reading

Edmonton Oilers' Connor McDavid (97) celebrates his 100th point this season with Leon Draisaitl (29) against the Vancouver Canucks during second period NHL action in Edmonton on Saturday, May 8, 2021.THE CANADIAN PRESS/Jason Franson
Edmonton Oilers captain Connor McDavid races to 100 points this NHL season

Edmonton Oilers forward Connor McDavid sprinted to a 100-point NHL season and… Continue reading

A Foodora courier is pictured as they pick up an order for delivery from a restaurant in Toronto, Thursday, Feb. 27, 2020. THE CANADIAN PRESS/Nathan Denette
Two-year EI review needed to buy time for needed tech upgrades, Qualtrough says

OTTAWA — Canada’s employment minister says a budgetary pledge for funding to… Continue reading

A person wears a face mask as they walk through McGill University during light snowfall in Montreal, Sunday, December 20, 2020 as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
Some universities say no to proof of vaccination requirement

A COVID-19 vaccine likely won’t be a requirement to return to the… Continue reading

Prime Minister Justin Trudeau and Deputy Prime Minister and Minister of Finance Chrystia Freeland, participate in a virtual discussion with seniors from Residence Memphremagog in Magog, Que., from Ottawa on Monday, May 3, 2021. Liberals, Conservatives and New Democrats are on the move in advance of a potential election this year, recruiting candidates, training volunteers and grappling with how to kiss babies and press the flesh in a virtual, pandemic-restricted world. THE CANADIAN PRESS/Sean Kilpatrick
Grappling with how to press the virtual flesh, parties gear up for election showdown

OTTAWA — The three main national parties are firing up their election… Continue reading

Nuns of Mother Teresa’s Missionaries of Charity, carry some of her relics during a vigil of prayer in preparation for the canonization of Mother Teresa in the St. John in Latheran Basilica at the Vatican, Friday, Sept. 2, 2016. In which city did she do much of her charitable work? (AP Photo/Gregorio Borgia)
QUIZ: How much do you know about these motherhood issues?

In honour of Mother’s Day, take this 10-question quiz

Dr. Robert Strang, Nova Scotia's chief medical officer of health, is setting off a social media reaction with his calls to stop non essential shopping, such as "buying sandals at Costco", with this photo of his worn sandals, which he published to social media on Saturday, May 8, 2021. THE CANADIAN PRESS/HO-Dr. Robert Strang, *MANDATORY CREDIT*
Nova Scotia’s top doctor sparks meme with caution on non-essential shopping

HALIFAX — Nova Scotia’s top doctor has launched a social media meme… Continue reading

Most Read