The unemployment rate in the U.S. fell to 11.1% in June, with a footnote in the report saying a “misclassification” error means the rate may be as much as a percentage point higher.
The rate fell from 13.3% in the previous month, when the Labor Department noted in its Thursday report that the actual rate might have been 3% higher. The issue is some people who lost jobs because of the COVID-19 pandemic were classified as “absent from work” when they had, in fact, been laid off and were unemployed, the report said.
Initial jobless claims rose by 1.43 million last week, the Labor Department said. That’s higher than the 1.34 million average forecast in a Trading Economics survey of economists.
The June report showed the number of employed Americans rose by 4.8 million, primarily “callbacks as states reopen,” said Diane Swonk, chief economist at Grant Thornton and an advisor to the Federal Reserve. Most of those jobs were in restaurants, bars, retail and healthcare, she said.
Whether that increase in jobs can be sustained depends on how the U.S. responds to a reacceleration of the COVID-19 pandemic, she said.
“The virus and how well we manage it determines the course of the recovery, not whether we reopen before we can contain it,” Swonk said.
The number of confirmed new COVID-19 cases in the U.S. reached a record 52,789 on Wednesday, the day after White House pandemic advisor Anthony Fauci told Congress the nation could soon see more than 100,000 a day.
The average unemployment rate probably will fall to 12% in the current quarter from a record 13% in the second quarter, the National Association of Realtors said in a forecast on Monday. That’s up from a 3.8% rate in the first quarter, NAR said.
For the year, NAR said it expects the jobless rate to average 9.8% and fall to 7% in 2021.
