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Nonfarm Payrolls Surge 4.8M in June - Unemployment Drops to 11.1%

July 2, 2020

Total nonfarm payroll employment rose by 4.8 million in June, and the unemployment rate declined to 11.1 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it. In June, employment in leisure and hospitality rose sharply.

Investors were looking for a 2.9 million increase with a jobless rate of 12.4%

Notable job gains also occurred in retail trade, education and health services, other services, manufacturing, and professional and business services.

This data presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics.  The establishment survey measures nonfarm employment, hours, and earnings by industry. For more information about the concepts and statistical methodology used in these two surveys, see the Technical Note.

Household Survey Data

The unemployment rate declined by 2.2 percentage points to 11.1 percent in June, and the number of unemployed persons fell by 3.2 million to 17.8 million. Although unemployment fell in May and June, the jobless rate and the number of unemployed are up by 7.6 percentage points and 12.0 million, respectively, since February. (See table A-1.

Among the major worker groups, the unemployment rates declined in June for adult men  (10.2 percent), adult women (11.2 percent), teenagers (23.2 percent), Whites (10.1 percent), Blacks (15.4 percent), and Hispanics (14.5 percent). The jobless rate for Asians (13.8 percent) changed little over the month.

The number of unemployed persons who were on temporary layoff decreased by 4.8 million in June to 10.6 million, following a decline of 2.7 million in May. The number of permanent job losers continued to rise, increasing by 588,000 to 2.9 million in June. The number of unemployed reentrants to the labor force rose by 711,000 to 2.4 million. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.)

The number of unemployed persons who were jobless less than 5 weeks declined by 1.0 million to 2.8 million in June. Unemployed persons who were jobless 5 to 14 weeks numbered 11.5 million, down by 3.3 million over the month, and accounted for 65.2 percent of the unemployed. By contrast, the number of persons jobless 15 to 26 weeks and the long-term unemployed (those jobless for 27 weeks or more) saw over-the-month increases (+825,000 to 1.9 million and +227,000 to 1.4 million, respectively).

The labor force participation rate increased by 0.7 percentage point in June to 61.5 percent, but is 1.9 percentage points below its February level. Total employment, as measured by the household survey, rose by 4.9 million to 142.2 million in June. The employment-population ratio, at 54.6 percent, rose by 1.8 percentage points over the month but is 6.5 percentage points lower than in February.

In June, the number of persons who usually work full time increased by 2.4 million to 118.9 million, and the number who usually work part time also rose by 2.4 million to 23.2 million.

The number of persons employed part time for economic reasons declined by 1.6 million to 9.1 million in June but is still more than double its February level. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. This group  includes persons who usually work full time and persons who usually work part time.

The number of persons not in the labor force who currently want a job, at 8.2 million, declined by 767,000 in June but remained 3.2 million higher than in February. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.

Persons marginally attached to the labor force--a subset of persons not in the labor force who currently want a job--numbered 2.5 million in June, little different from the prior month. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months but had not looked
for work in the 4 weeks preceding the survey. Discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, numbered 681,000 in June, essentially unchanged from the previous month.

Establishment Survey Data

Total nonfarm payroll employment increased by 4.8 million in June, following an increase of 2.7 million in May. These gains reflect a partial resumption of economic activity that had been curtailed due to the coronavirus pandemic in April and March, when employment fell by a total of 22.2 million in the 2 months combined. In June, nonfarm employment was 14.7 million, or 9.6 percent, lower than its February level. Employment in leisure and hospitality rose sharply in June. Notable job gains also occurred in retail trade, education and health services, other services, manufacturing, and professional and business services. Employment continued to decline in mining.

In June, employment in leisure and hospitality increased by 2.1 million, accounting for about two-fifths of the gain in total nonfarm employment. Over the month, employment in food services and drinking places rose by 1.5 million, following a gain of the same magnitude in May. Despite these gains, employment in food services and drinking places is down by 3.1 million since February. Employment also rose in June in amusements, gambling, and recreation (+353,000) and in the accommodation industry  (+239,000).

In June, employment in retail trade rose by 740,000, after a gain of 372,000 in May and losses totaling 2.4 million in March and April combined. On net, employment in the industry is 1.3 million lower than in February. In June, notable job gains occurred in clothing and clothing accessories stores (+202,000), general merchandise stores (+108,000), furniture and home furnishings stores (+84,000), and motor vehicle and parts dealers (+84,000).

Employment increased by 568,000 in education and health services in June but is 1.8 million below February's level. Health care employment increased by 358,000 over the month, with gains in offices of dentists (+190,000), offices of physicians (+80,000), and offices of other health practitioners (+48,000). Elsewhere in health care, job
losses continued in nursing care facilities (-18,000). Employment increased in the social assistance industry (+117,000), reflecting gains in child day care services (+80,000) and in individual and family services (+28,000). Employment in private education rose by 93,000 over the month.

Employment increased in the other services industry in June (+357,000), with about three-fourths of the increase occurring in personal and laundry services (+264,000). Since February, employment in the other services industry is down by 752,000.

In June, manufacturing employment rose by 356,000 but is down by 757,000 since February. June employment increases were concentrated in the durable goods component, with motor vehicles and parts (+196,000) accounting for over half of the job gain in manufacturing. Employment also increased over the month in miscellaneous durable goods manufacturing (+26,000) and machinery (+18,000). Within the nondurable goods
component, the largest job gain occurred in plastics and rubber products (+22,000).

Professional and business services added 306,000 jobs in June, but employment is 1.8 million below its February level. In June, employment rose in temporary help services (+149,000), services to buildings and dwellings (+53,000), and accounting and bookkeeping services (+18,000). By contrast, employment declined in computer systems design and related services (-20,000).

Construction employment increased by 158,000 in June, following a gain of 453,000 in May. These gains accounted for more than half of the decline in March and April (-1.1 million combined). Over-the-month gains occurred in specialty trade contractors (+135,000), with growth about equally split between the residential and nonresidential components. Job gains also occurred in construction of buildings (+32,000).

Transportation and warehousing added 99,000 jobs in June, following declines in the prior 2 months (-588,000 in April and May combined). In June, employment rose in warehousing and storage (+61,000), couriers and messengers (+21,000), truck transportation (+8,000), and support activities for transportation (+7,000).

Wholesale trade employment rose by 68,000 in June but is down by 317,000 since February. In June, job gains occurred in the durable goods (+39,000) and nondurable goods (+27,000) components.

Financial activities added 32,000 jobs in June, with over half of the gain in real estate (+18,000). Since February, employment in financial activities is down by 237,000.

Government employment changed little in June (+33,000), as job gains in local government education (+70,000) were partially offset by job losses in state government (-25,000). Government employment is 1.5 million below its February level.

Mining continued to lose jobs in June (-10,000), with most of the decline occurring in support activities for mining (-7,000). Mining employment is down by 123,000 since a recent peak in January 2019, although nearly three-fourths of the decline has occurred since February 2020.

In June, average hourly earnings for all employees on private nonfarm payrolls fell by 35 cents to $29.37. Average hourly earnings of private-sector production and nonsupervisory employees decreased by 23 cents to $24.74 in June. The decreases in average hourly earnings largely reflect job gains among lower-paid workers; these  changes put downward pressure on the average hourly earnings estimates.

The average workweek for all employees on private nonfarm payrolls decreased by 0.2 hour to 34.5 hours in June. In manufacturing, the workweek rose by 0.5 hour to 39.2 hours, and overtime was unchanged at 2.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls fell by 0.2 hour to 33.9 hours. The recent employment changes, especially in industries with shorter workweeks, complicate monthly comparisons of the average weekly hours estimates.

The change in total nonfarm payroll employment for April was revised down by 100,000, from -20.7 million to -20.8 million, and the change for May was revised up by 190,000, from +2.5 million to +2.7 million. With these revisions, employment in April and May combined was 90,000 higher than previously reported. (Monthly revisions result from
additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)

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