Skip to content Skip to footer

Despite Job Gains in June, Recovery Will Slow Without Congressional Action

We are still very far from a situation that is anything close to normal.

A worker cleans patio tables at the Armenian cuisine restaurant Monta Factory on July 2, 2020, in Glendale, California, after Los Angeles County restaurants were force by state order to shut their doors again to dine-in eating due to a spike in COVID-19 cases.

The June employment report showed the economy adding back 4.8 million jobs, following a gain of 2.7 million (revised up by 200,000) in May. This two-month gain leaves the economy down by just under 14.7 million jobs from its pre-pandemic level in February.

The unemployment rate fell 2.2 percentage points to 11.1 percent. However, this understates the actual drop since the number of people misclassified as employed rather than unemployed fell from roughly 3.0 percent of the labor force in May to 1.0 percent in June. It is important to remember that these data reflect the state of the labor market in the second week of June before the coronavirus infection rate began to soar again.

The job gains were primarily in the sectors that had been hardest hit in the shutdown. Restaurants added 1,483,000 jobs in June, accounting for more than one-quarter of the total gain. However, employment in the sector is still down by more than 3.1 million from its February level. Retail added 739,800 jobs, with more than a quarter of these (201,600 jobs) being in clothing. Retail employment is now down by a bit less than 1.3 million jobs from February.

Employment in health care jumped by 358,000 in June, with the 190,400 gain in dentists’ offices accounting for more than one-half of the rise. Health care employment is still down by more than 900,000 since February. Manufacturing added 356,000 jobs and construction added 158,000 in June. They are now down 757,000 and 472,000 jobs, respectively, from pre-pandemic levels.

One sector that has not recovered is motion pictures. While it added 2,600 jobs in June, its current employment level of 212,600 is less than half of its February level. Mining also continues to be hard hit, losing another 9,800 jobs in June. The hardest-hit sector within mining is support activities, which are mostly jobs associated with opening new sites. These are down by 71,600, more than 20 percent, since February.

The local government sector added 57,000 jobs in June, while the state sector shed 25,000 jobs. The two sectors together are down 1,487,000 jobs since February. This figure will grow sharply as governments enter their new fiscal year with massive shortfalls unless Congress appropriates a large amount of assistance.

On the household side, the picture is supportive of a strong but very uneven bounce back. First and foremost, it seems that people who reported being on temporary layoffs are getting their jobs back. This number stood at 18,630,000 in April, but is now down to 10,565,000, accounting for 59.5 percent of the unemployed. The number of unemployed who are reentrants also has risen sharply from 1,477,000 in April to 2,356,000 in June. This reflects greater confidence in the labor market.

On the other side, more than 4.6 million people have dropped out of the labor force since February. Just under 1 million of these workers have been prime-age (between 25 and 54) women. Workers over age 65 account for more than 900,000 of those leaving the labor force. More than 1.9 million young workers (under age 25) left the labor market.

While the overall employment-to-population ratio (EPOP) is down by 6.5 percentage points since February, it is down by 8.6 percentage points for Blacks and 9.4 percentage points for Black men. The EPOP is down 9.1 percentage points for Hispanics and 10.3 percentage points for Hispanic men. For Asians, the EPOP is down by 9.9 percentage points.

These differences show up clearly in looking at employment by education level. The EPOP for college grads is down 4.0 percentage points since February, compared to a drop of 7.6 percentage points for those with just a high school degree and 9.4 percentage points for those without a high school degree. This also shows up in the loss of part-time jobs. While involuntary part-time employment has more than doubled, from 4.3 million to 9.1 million, voluntary part-time employment has fallen by more than 20 percent, from 22.2 million to 17.1 million. This reflects the loss of jobs in restaurants and hotels, many of which are part-time.

This is a mostly positive report, indicating that the economy was bouncing back, although it still has very far to go, with pretty much all the numbers looking worse in June than at their very worst point in the Great Recession. However, this bounce back is virtually certain to slow, especially if Congress does not come through with additional funding for the unemployed and for state and local governments. With the pandemic spreading out of control, there will certainly be more shutdowns, and people will be reluctant to use services even in areas without shutdowns. In short, we are very far from a situation that is anything close to normal.

We’re not going to stand for it. Are you?

You don’t bury your head in the sand. You know as well as we do what we’re facing as a country, as a people, and as a global community. Here at Truthout, we’re gearing up to meet these threats head on, but we need your support to do it: We must raise $23,000 before midnight tomorrow to ensure we can keep publishing independent journalism that doesn’t shy away from difficult — and often dangerous — topics.

We can do this vital work because unlike most media, our journalism is free from government or corporate influence and censorship. But this is only sustainable if we have your support. If you like what you’re reading or just value what we do, will you take a few seconds to contribute to our work?