President Donald Trump speaks to journalists in the Brady Press Briefing Room at the White House July 2, 2020. The president addressed reports that the unemployment rate fell to 11.1%.
Chip Somodevilla/Getty Images
The U.S. unemployment rate is at its lowest level in months and the economy added a record number of jobs in June.
“The Great American Comeback continues!” Rep. Fred Keller, R-Pa., tweeted after the Bureau of Labor Statistics’ employment update on Thursday morning.
President Trump cited the news as evidence that the “economy is roaring back.”
But there are many reasons to temper those positive vibes, according to economists.
The employment crisis is still worse than any time since the Great Depression, the country’s worst economic downturn in its industrial history.
At least 10 million more people are jobless compared with pre-pandemic levels. Layoffs once deemed temporary have turned into permanent job loss. Millions are still filing for unemployment benefits each week.
The employment situation could stall or reverse course once supplemental unemployment aid expires after July and businesses exhaust federal relief funding that’s propping up payrolls.
States have also had to halt or reverse their reopening plans due to flareups of coronavirus infection.
“The outlook doesn’t look too positive,” said Ioana Marinescu, an assistant professor of economics at the University of Pennsylvania. “I don’t think we are out of the woods at all.”
The unemployment rate fell to 11.1% in June, a notable improvement from the 14.7% rate in April and 13.3% in May.
However, those levels are higher than at any time in six decades, toward the end of the Great Depression.
By comparison, the unemployment rate peaked at 10% during the Great Recession a decade ago. It’s also a stark reversal from February’s 3.5% rate.
About 5 million Americans have come off the unemployment ranks since April, the peak of the coronavirus-induced employment crisis.
But there are still about 12 million people without jobs who had one in February.
“Obviously, it’s still really bad. It’s just the [June] numbers weren’t as bad as [May],” Marinescu said.
Permanent job loss
The share of workers who’d been temporarily laid off continues to decline, suggesting that many have been recalled to their jobs as businesses reopen their doors.
But some of this dynamic is likely attributable to these temporary layoffs becoming permanently lost jobs, as businesses closed for good or couldn’t support as large a staff due to economic pressures.
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