Economy added 4.8M jobs in June, before surge in coronavirus infections

The economy gained 4.8 million jobs in June, lowering the unemployment rate to 11.1%, the Labor Department said Thursday.

June's job gains were a record and easily beat forecasters' expectations. Nevertheless, the jobs report is clouded by the fact that, even with the improvements, the labor market was in historially bad shape even before coronavirus outbreaks worsened throughout the South and West later in June.

“Looking beyond the June employment data, worrisome signs have emerged in recent days regarding a pullback in store traffic and spending likely linked to the resurgence of COVID-19," said Mark Hamrick, a senior economic analyst at Bankrate.com. "While the economy is widely thought to be rebounding now that we’ve quietly slipped into the third quarter, the strength and sustainability of the rebound remain at risk."

Perhaps most troubling, Thursday's report showed a higher number, 2.8 million, of job losses described as permanent. In previous months of the pandemic, around 90% of job losses had been described as temporary, suggesting that the workers hoped to go back to their old jobs once the pandemic passed.

Two-fifths of June's job gains took place in the leisure and hospitality sector, which had been badly bruised by the pandemic. Those jobs, though, are the ones most in danger from rising cases of the coronavirus. Restaurants and bars in several states have had to curtail service in the past few weeks.

Employment in retail rose by 740,000 last month, after a gain of 372,000 in May and losses totaling 2.4 million in March and April combined. On net, employment in this sector is 1.3 million lower than in February.

While the unemployment rate has dropped for two consecutive months, the improvement is uneven among the races. The jobless rate in June for white workers was 10.1%, while the unemployment rates for Black or African American, Asian, and Hispanic or Latino workers were much higher: 15.4%, 13.8% and 14.5%, respectively.