WASHINGTON • The rebound in the United States labour market accelerated last month as the economy reopened more broadly, though filings for unemployment benefits remained elevated last week as coronavirus cases picked up.
Payrolls rose by 4.8 million last month after an upwardly revised 2.7 million gain in the prior month, according to a Labour Department report yesterday.
The unemployment rate fell for a second month, by 2.2 percentage points to 11.1 per cent, still far above the pre-pandemic half-century low of 3.5 per cent.
The June jobs report, reflecting a snapshot of mid-month conditions, encapsulates a flurry of rehiring after states lifted stay-at-home orders and began the process of reopening their economies during the pandemic.
Adding to those gains in the coming months may be critical to President Donald Trump's re-election chances, as well as to the extension of a US stock-market rally following the best quarter since 1998.
US stock futures extended gains following the data. Treasuries and the dollar fell.
A separate report from the Labour Department showed initial applications for unemployment insurance in regular state programmes fell by less than expected, to 1.43 million, in the week ended June 27.
Continuing claims - or claims for ongoing unemployment benefits in state programmes - rose slightly to 19.3 million in the week ended June 20.
Economists had forecast payrolls to rise by 3.23 million - the median in a range of 500,000 to nine million - and an unemployment rate of 12.5 per cent.
The Labour Department's Bureau of Labour Statistics said it had largely fixed a problem from recent months, when many respondents had been misclassified as employed when they should have been labelled as unemployed.
Adjusted for the errors, the June unemployment rate would have been about 1 percentage point higher - or 12.3 per cent, compared with 16.4 per cent in May.
A resurgence in virus cases has complicated the picture, leading states across the country to reverse or halt reopening efforts in hopes of slowing the spread.
Paired with the coming expiration of the federal government's extra US$600 (S$837) in weekly unemployment benefits, the economy could take another hit in the months ahead.
In addition, weekly figures show the number of Americans claiming jobless benefits remains extremely elevated, posting the first increase in state programmes in four weeks.
The increase in payrolls was led by leisure and hospitality and retail, illustrating the effect of the easing of business restrictions. Most sectors reported gains; mining and logging, along with utilities, were the only major industries to cut jobs.
State government payrolls fell by another 25,000, as budget situations grew more dire amid falling tax revenues.
Meanwhile, the household survey showed that more than 2.8 million Americans permanently lost their jobs last month, a 588,000 increase from a month earlier that was the biggest since the start of 2009.
Wall Street was set to open higher following the data, with US stock futures extending gains.
Optimism about a post-pandemic rebound in business activity, aggressive US stimulus and hopes of a Covid-19 vaccine have fuelled a Wall Street rally since April, with the Nasdaq on Wednesday notching up its sixth record closing high since early last month.
"What we're seeing from the payroll report is that the labour markets are healing, or at least had been healing in May and June," said Mr Patrick Leary, chief market strategist at Incapital in Minneapolis.
BLOOMBERG, REUTERS
