US economy adds better than expected 4.8 million payrolls, unemployment rate falls to 11.1%

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The U.S. economy added a greater than expected number of 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 millions of 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

  • Unemployment rate: 11.1% vs. 12.5% expected

  • Average hourly earnings, month on month: -1.2% vs. -0.8% expected

  • Average hourly earnings, year on year: +5.0% vs. +5.3% expected

The June jobs report came following a massive upside surprise in May, during which the economy unexpectedly added payrolls, when a loss of more than 7 million jobs had been expected.

Still, the past two months’ worth of better-than-expected payrolls additions has not been enough to make up for the record decline in April, when virus-related business closures wiped out more than 20 million jobs from the economy.

May’s payrolls were upwardly revised by 190,000 to 2.699 million, while April’s payroll losses were revised down by 100,000 to 20.8 million.

Ahead of the report, estimates for the June payrolls gain spanned a wide range, though none of the more than 70 economists polled by Bloomberg expected to see net job losses for June.

By industry, leisure and hospitality again led non-farm payroll advances by a wide margin, with these types of jobs increasing by 2.088 million in June, following May’s increase of 1.4 million. This was followed in the services sector by retail trade, which saw 739,800 payroll additions to build on May’s 371,500. Information-related jobs were the only category to see net job declines in June.

Manufacturing payrolls rose by 356,000 in June, improving from May’s 250,000 but missing consensus expectations for a rise of 425,000.

Ahead of the report, data had underscored the labor market’s steady improvement over the past two months. New jobless claims fell in each week since early April, including in the latest report for the week ended June 27, which was also released Thursday morning. 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.

This post is breaking. Check back for updates.

NEW YORK, NEW YORK – APRIL 04: A man wearing a protective mask makes a purchase from a cashier wearing a protective mask as the coronavirus continues to spread on April 04, 2020 in New York City. The coronavirus (COVID-19) pandemic has spread to at least 180 countries and territories across the world, claiming over 40,000 lives and infecting hundreds of thousands more. (Photo by Cindy Ord/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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2020-07-02 05:54:00

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