The US Department of Labor has just released data showing that the number of non-agricultural jobs created in June 2020 was 4.8 million – the highest since 1939 and higher than forecast in a Reuters survey.
Previously, economists participating in a Reuters survey predicted that 3 million jobs would be restored in June. However, the US Department of Labor said that the total number of non-agricultural jobs is still lower than the previous month.
An employee works at a restaurant in Bloomfield Hills, Michigan, June 8.
Hiring last month was driven by the leisure and hospitality industry, which added 2.1 million jobs.
However, measuring the unemployment rate can be inaccurate, because people misclassify their employment status when they were employed but did not work last month.
Reuters said that without the misclassification, the unemployment rate would have been 12.3%.
Unemployment rate in the US since 1948. Graphic: NYT
With the record figures, President Donald Trump immediately praised the increase in employment as proof that the US economy was recovering.
The US is recording a spike in positive cases in large areas of the country, such as Arizona and populous states such as California, Florida and Texas.
`Maybe it’s the calm before the storm,` Chris Rupkey – chief economist at MUFG in New York commented on the positive signs of the labor market last month.
Hiring last month was boosted by the government’s Paycheck Protection Program.
This has caused a second wave of layoffs, keeping the number of people filing for weekly unemployment benefits high.
By mid-June 2020, there were 31.5 million people receiving unemployment benefits, an increase of nearly 917,000 compared to the first week of the month.
`Failure to act will significantly reduce the chances of a quick recovery,` concluded James Knightley, international economist at ING.