United States: Labor market continues to recover in June
July 2, 2020
Total non-farm payrolls soared 4.8 million in June, increasing at the fastest rate since the series began in 1939, and beat market analysts’ expectations of a 3.0 million rise. This follows May’s 2.7 million payroll rise.
Employment in the leisure and hospitality, manufacturing and professional and business services sectors increased notably in June, as containment measures gradually eased.
The unemployment rate decreased to 11.1% in June from 13.3% in May, while the labor force participation rate increased from 60.8% in May to 61.5% in June.
Hourly earnings fell 1.2% month-on-month in June (May: -1.0% month-on-month), while annual wage growth decelerated from 6.7% in May to 5.0% in June.
Despite another positive reading in June, total non-farm payrolls are still down nearly 15 million since February. Going forward, the labor market should gradually improve as lockdown measures continue to ease, but our panelists expect the unemployment rate will remain elevated for the remainder of this year.
Commenting on June’s reading, James Knightly, an economist at ING, noted:
“while today’s jobs report gives a good headline, there are huge headwinds which mean a full recovery in the jobs market is a very long way off.”
Author: Steven Burke, Economist