The American economy continued its recovery from the pandemic-related shut downs in June.
Unemployment, which had been at a record low in February—3.5 percent—had surged as high as 14.7 percent in April. It declined to 13.3 percent in May and, in June, fell to 11.1 percent. Almost 5 million more people had jobs in June than in May.
Most ethnic groups saw an improvement in the unemployment numbers. Black unemployment, which had ticked up to 16.8 percent in May, dropped to 15.4 percent
Leisure and hospitality (i.e. restaurants and bars) had the best job gains, 2.1 million, about 40 percent of all job gains. But continued gains in this sector are now threatened by the recent spike in Coronavirus cases, causing some governors to shut down again or delay reopening, including New York City with its vast restaurant industry.
Manufacturing employment rose by 356,000, but that sector is still down 757,000 jobs from February.
Assuming the spike in Coronavirus cases is temporary, the economy should continue to strengthen. Just how quickly is anyone’s guess. The $600-per-week federal supplement to state unemployment insurance payments is scheduled to end on July 31. Many workers have been reluctant to return to work because they have been getting more in insurance payments than they had been earning in wages. So, I expect that while the drop in the unemployment figures will be modest in July, they will be much larger in August as people lose a powerful incentive to stay on the sidelines.