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Unemployment rate in U.S. falls to 11%, but new job closings are expected

Unemployment rate in U.S. falls to 11%, but new job closings are expected

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The unemployment rate in the United States fell to 11.1% after the economy added 4.8 million jobs, the government reported this Thursday. However, the recovery in the labor market could be in trouble due to a new round of closings and layoffs in the face of the new increase in coronavirus cases.

Although it fell compared to 13.3% in May, it still remains at Great Depression levels. In addition, the data was collected during the second week of June, just before several states started reversing or suspending their economic reopening to try to contain a new onslaught of the virus.

The news was released as the number of daily confirmed infections in the United States reached a new all-time high of 50,700, more than double from last month, according to the Johns Hopkins University count.

Unemployment rate in U.S. falls to 11%, but new job closings are expected
The data was collected during the second week of June, just before several states started reversing or suspending their economic reopening to try to contain a new onslaught of the virus.

The rebound, which is mostly concentrated in the south and west of the country, has caused states like California, Texas, Arizona and Florida to close again bars, restaurants, movie theaters, beaches and swimming pools, leaving people out of work for the second time.

President Trump insists on declaring that the labor report shows that the economy “is re-emerging,” although he acknowledged that there are still areas where we “continue to put out the flames” of the virus.

Economists expect the recovery to take longer than Trump’s optimistic projections, and the unemployment rate is likely to end the year at levels close to double digits.

Despite the job market improving in June for the second consecutive month, the Labor Department report revealed that the United States has only recovered about a third of the 22 million jobs lost during the closings of the past few months.

The layoff figures remain high. The number of Americans applying for unemployment benefits fell just slightly last week to 1.4 million, according to official figures. Despite the fact that the weekly figure has been declining from its highest point last March, it still remains extremely high, according to all-time standards.

And the total number of people receiving unemployment aid is still considerable: 19 million.

Job growth in the United States during June was primarily fueled by companies that called back employees who had been laid off during widespread closings across the country.

The Labor Department report also reflected that the number of Americans who claim to have lost their jobs permanently added 600,000 cases last month to a total of nearly 2.9 million.

Many companies, especially small ones, are closing definitively despite the fact that most closings have been lifted.

Erik Hurst, professor of economics at the University of Chicago, said many restaurants, bars and gyms cannot survive if they operate at half capacity, and customers will remain cautious until there is a vaccine.

“We don’t want to get a haircut as often as we used to,” said Hurst. “We don’t want to go out to dinner as often as we used to.”

The closings of the last two weeks will be reflected in the July employment report, which will be released in early August.

The Associated Press/OnCuba.

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