Subscribe to How To Reopen, our weekly newsletter on what it takes to reboot business in the midst of a pandemic.
The unemployment rate dropped from 13.3% in May to 11.1% in June. That’s the second straight month of a pick-up in hirings after the jobless rate topped out at 14.7% in April—the highest level since 1940.
The U.S. Bureau of Labor Statistics (BLS) jobs report finds the U.S. economy added 4.8 million jobs in June, following adding 2.5 million net jobs in May. Economists projected 3 million jobs would be added in June, so the data is better than expected.
The June jobs numbers also show the economic slump is still hitting some communities harder than others. The jobless rate among white workers is 10.1%, compared with 13.8% for Asian workers, 14.5% for Hispanic workers, and 15.4% among Black workers. Among adult men the rate is 10.2%, compared to 11.2% among adult women.
A second straight month of an improving labor market signals employers are rehiring, and the economy has moved from contraction to recovery. But that rebound is about to be tested by spiking COVID-19 cases in many states and a wave of re-closing orders.
“The real risk now is we start backsliding and start contracting again,” said Mark Zandi, chief economist at Moody’s Analytics. The resurgence of the virus, he says, is already decreasing some economic activity in Texas and Florida.
This official unemployment rate of 11.1% is likely undercounting the actual level of joblessness from June. The BLS defines the unemployed as people without jobs who are also looking for new positions. Some laid-off workers may be waiting it out before starting their job search given the deadliness of the virus.
More must-read finance coverage from Fortune:
- If Ernst & Young auditors had done this one thing, they might have uncovered Wirecard’s $2 billion fraud years sooner
- After overbooking flights in a pandemic, American Airlines is now paying passengers to get off
- Should Facebook investors ride out the ad boycott—or cash out?
- Safelite’s CEO on steering the company through crisis—and getting sales back to pre-pandemic levels
- Former Honeywell CEO David Cote just wrote one of the best guides ever on how to lead a company