June jobs report: U.S. economy adds better than expected 4.8 million payrolls, unemployment rate falls to 11.1%
The U.S. economy added millions more payrolls in June from May, as regions across the country eased social distancing restrictions and allowed more businesses to reopen. The net additions in payrolls topped consensus expectations.
Meanwhile, the unemployment rate fell from May’s level but held at a historically high level, as many Americans remained out of work with the pandemic still under way.
Here were the main metrics from the Department of Labor’s report, compared to consensus estimates compiled by Bloomberg:
Change in non-farm payrolls: +4.8 million vs. +3.23 million expected
The June jobs report came following a massive upside surprise in May, during which the economy unexpectedly added a net 2.5 million non-farm payrolls in the initial print for the biggest gain on record, based on data extending back to 1939. A loss of more than 7 million jobs had been expected.
Estimates for the June payrolls gain also spanned a wide range, though none of the more than 70 economists polled by Bloomberg expected to see net job losses for June.
“We are in a whole new world of trying to model what data is going to be, because there’s not an economist in the world that’s ever gone through a forced economic shutdown,” Tom Essaye, Sevens Report Research founder, told Yahoo Finance’s The First Trade on Tuesday. “And that’s why a lot of these numbers are completely blowing past what the expectation is.”
Downside risks to the June report remained, however. Some economists noted that stimulus-related impacts may have powered May’s non-farm payrolls gain, distorting the underlying trends in hiring in a way that may not have been replicated in June.
In a note, Barclays economist Michael Gapen highlighted “the possibility that the burst in employment was temporarily fueled by [Paycheck Protection Program] lending requirements that simply pulled forward hiring that was previously expected in June.”
“If so, this would suggest that the surge in May hiring was more of a one-off event and we could see some give-back in June employment,” he added.
But other data has underscored the labor market’s steady improvement over the past two months. Jobless claims have fallen in every week since early April, and continuing unemployment claims trended slightly lower in June. Employment indices in each of the Institute for Supply Management’s manufacturing and non-manufacturing surveys improved in the latest reports.
Still, ADP’s monthly jobs report Wednesday missed estimates, and showed net private payroll gains edged down to nearly 2.37 million in June, from May’s upwardly revised gain of more than 3 million.
The Department of Labor’s June jobs report was released on a Thursday, or a day earlier than typical, due to the market closures in observance of the Fourth of July holiday on Friday.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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