June Job Increase Threatened By Recent COVID-19 Surge

Jul 5, 2020
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SCOTT DETROW, HOST:

June may have brought an increase in jobs, but it also led the way to a spike in coronavirus cases across the country. U.S. employers added 4.8 million jobs in June, and that was cause for celebration from President Trump.

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PRESIDENT DONALD TRUMP: You're going to have a fantastic third quarter. It'll be a third quarter the likes of which nobody has ever seen before, in my opinion. And the good thing is the numbers will be coming out just prior to the election, so people will be able to see those numbers.

DETROW: But what will happen to those jobs as the nation wrestles with all of these new infections? NPR's Scott Horsley joins us now to make sense of things.

Hey, Scott.

SCOTT HORSLEY, BYLINE: Good morning.

DETROW: So those coronavirus numbers - let's start with those. They are not going down. They are going up. The U.S. is setting a record each day many times recently. Was it maybe too early for President Trump to be spiking the football on job gains?

HORSLEY: You know, it's really worrisome. Keep in mind the job report is a snapshot of the job market as it was about three weeks ago. And way back then, the daily infection rate was around 20,000 and holding. It's obviously a very different picture today, and as a result, we're seeing states cracking down again - you know, closing bars that had just reopened or nixing plans for indoor restaurant dining. It also means shoppers are likely to be a little bit more cautious about going out and spending money.

One and a half million of the jobs that were added last month were in bars and restaurants. Nearly three-quarters of a million were in retail. Some of those jobs could be in jeopardy now, and that's why you hear Joe Biden, the presumptive Democratic presidential nominee, saying Trump was premature in celebrating.

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JOE BIDEN: We're still down nearly 15 million jobs. And the pandemic is getting worse, not better. And it doesn't have to. Millions of Americans are still out of work, wondering when or if their job will come back or worried about how to pay the bills in the meantime.

HORSLEY: Biden accused the president of bungling his own job and failing to control this pandemic in a way that other countries have managed to do and thereby jeopardizing not only Americans' health but the economic recovery as well.

DETROW: So even if things have drastically changed since the period when these - when this jobs snapshot was taken, we can still learn something from these numbers, right? Like, what does it tell us that 4.8 million jobs were still created?

HORSLEY: It does tell us that a lot of Americans went back to work in June - 4.8 million is a record for a single month, and it comes on top of the 2.7 million jobs that were added in May. So that's good. But you have to remember this economy lost more than 22 million jobs in March and April when the coronavirus landed its first big punch here. So as positive as the comeback has been, we've still recovered only about 1 out of every 3 jobs that were lost. And that's why we still see an unemployment rate - 11.1% - that is higher than in any previous downturn since the 1930s.

DETROW: If you chart the unemployment rate since the coronavirus crisis began - let me put it this way. Is this a roller coaster that you would want to ride, Scott Horsley?

HORSLEY: (Laughter) It is certainly a roller coaster. Remember, we came in with the lowest unemployment rate in half a century - just 3.5% back in February. And that tight job market - that was really good, creating a lot of opportunities for people who are often left on the sidelines of the workforce.

Unfortunately, a lot of those gains have now gone out the window. We've got double-digit unemployment across the board, and it's not hitting everyone the same way. Latinos saw the biggest spike in unemployment to almost 19% in the early days of the recession. A lot of Latinos work in restaurants and the service industries that were really hard-hit. That has improved a little bit in the last couple of months. The Latino jobless rate is now 14.5%.

Unemployment among African Americans is the highest of all - 15.4%. And unfortunately, that's not coming down as fast as for other groups. Like so much about this pandemic, job losses have really highlighted some long-standing fault lines in this country.

DETROW: So when Biden spoke last week, he also talked about this challenge that people have paying their bills. It's the beginning of the month. Rent is once again due. People have to buy groceries. Do we have any sense in the data of how Americans are dealing with this challenge?

HORSLEY: What's really remarkable in the data is how much federal relief payments have been helping to prop up household budgets. Between the supplemental unemployment benefits and those $1,200 checks, federal dollars accounted for almost 15% of total household income in April, more than 9% in May. Of course, those relief payments are mostly gone now, and the $600 a week in extra unemployment is set to run out at the end of this month. So unless there's another round of economic support from Congress or a big surge in new paychecks, that's going to leave a big hole in a lot of family budgets and in the national economy as well.

DETROW: NPR's Scott Horsley. Thanks so much.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.