June’s 4.8 million piles onto the 2.5 million added in May. The government attributed June’s historic increase to “continued resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it.”
However, the report only takes into account data through the middle of the month. Since that time, coronavirus cases have spiked in states throughout the U.S. – which has caused states to pause and even roll back reopening plans.
A resurgence in cases may begin to erase the economic gains we’ve begun to see.
“I suspect we’ll see a slowing-down or in fact a move in a direction no one is going to be particularly [happy] with,” Brian Marks, senior lecturer at the Pompea College of Business at the University of New Haven, told FOX Business, adding the unemployment numbers “will probably look worse as we head into August.”
That is partly due to another wave of layoffs that is likely to result from putting those tiered reopening plans on hold.
“We’re in for another economic impact for a lot of individuals for sure,” Dr. Anthony Harris, WorkCare’s chief innovation officer and medical director, told FOX Business. “It’s a double-whammy, unfortunately.”
While states like Texas and California – where cases are spiking – are understandably scaling back activity, an uptick in cases is also causing concern in other areas that fear a resurgence.
New York City and New Jersey, for example, have both put indoor dining plans on hold. And that uncertainty is likely to prevent employers from ramping up hiring too quickly.
“Any uncertainty that reduces the possibility of expenditures just filters through the entire economy,” Marks said.
Harris said businesses are “prudently” adopting a wait-and-see approach.
Both Harris and Marks expect these less positive trends to be reflected in July’s employment report.
And while the unemployment rate fell to 11.1 percent in June, from 13.3 percent the month prior, those statistics may not show the full picture, either.
The Bureau of Labor Statistics added a footnote at the bottom of its recent reports that there could have been a misclassification of individuals who were absent from their jobs.
The misclassification indicates the overall unemployment rate would’ve read 16.3 percent in May, instead of 13.3 percent.
In June, the BLS said it estimates the misclassification may have added as much as 1 percentage point to the unemployment number.
New, weekly unemployment claims continue to come in around 1.5 million – with more than 50 million new claims filed since mid-March. Filings have exceeded 1 million for 15 consecutive weeks.
The jobs added to the labor force in June marked the single largest monthly gain in history. Even with those outsized gains, however, the U.S. economy has only recovered about one-third of pandemic-related job losses, according to the Associated Press.