Contrary to much lower expert estimates, the Bureau of Labor Statistics found that 4.8 million jobs were added to non-farm payrolls in June, bringing our unemployment rate down to 11.1%.
Not only did this month’s jobs report wildly exceed expert expectations (of 3.23 million new jobs) for the second month in a row, but the BLS also revised the number of jobs created in April and May upward by 90,000. So, yes, the recovery is real — in just the last two months alone, the economy brought back 7.5 million jobs.
A massive factor in the recovery has been the resumption of the retail industry. In June and May, nearly half of the 2.4 million retail jobs lost in March and April were restored. And employment in education and health services increased by more than half a million jobs in the last month alone.
Meanwhile, real wage growth indicates that our job figures aren’t just hiding underemployment or insufficiently compensated work. Average hourly earnings are still up by 5% from a year ago, when the labor market was at its tightest. The number of people usually working part time and those working full time both rose by 2.4 million, with 119 million people now working full time — or more than a third of our population.
It’s possible that some states’ rollback of reopenings will temper this growth. The report, after all, relies on data aggregated in the middle of June, before the more recent outbreak of coronavirus cases in some heretofore relatively unaffected states. But it’s still a very big deal that our unemployment rate is headed back to single digits, even after economists predicted that we’d maintain double-digit unemployment into 2021. This is a promising sign that consumer demand is fueling a V-shaped recovery. And consider, this comes after our unemployment rate was projected to increase to 19% in May, not fall by more than a percentage point.
It is also worth noting is that the 4.8 million job increase in a single month beats the record of 2.7 million jobs created, set in last month’s May jobs report.
The June report also demonstrates the extraordinary success of the Paycheck Protection Program. Whereas permanent job losses have continued to increase, the number of unemployed people who were on temporary layoff “decreased by 4.8 million in June to 10.6 million, following a decline of 2.7 million in May.” In other words, the numbers show a large population of workers getting their jobs back.
All in all, this is extraordinary news and a telling sign to Congress: It’s worth the expense to extend that PPP lifeline to employers. They are bringing back jobs as quickly as possible, and there’s every reason to believe they will continue.
