4.8 Million Jobs Added in June, but Clouds Grow Over Economy – The New York Times

“I think we would be really hesitant,” he said. “Staying shut we understood, but reopening and reshutting is just wrong.”

Economists say stories like Mr. Terzian’s drive home a central fact of the crisis: The economy can’t truly recover until the pandemic is under control.

“The virus drives the economics,” said Betsey Stevenson, a member of the Council of Economic Advisers under President Barack Obama who is now at the University of Michigan. If cases continue to rise, as health officials warn, “we’re not going to have people going back to work,” Ms. Stevenson added.

“In fact, we’re going to see more people staying home,” she said.

Total employment has grown the past two months because companies have begun recalling temporarily laid-off workers. But layoffs have continued as the economic effects of the pandemic ripple through the economy, reaching businesses and industries that were spared earlier.

The number of people reporting they had permanently lost their jobs rose in June even as the number of workers on temporary layoff fell sharply for the second consecutive month. And the share of Americans out of a job for 14 weeks or less fell in June, while the share unemployed longer continued to rise — another sign that while short-term job losses are abating, more enduring damage lingers.

“We’re going on four months now,” said Olugbenga Ajilore, a senior economist at the Center for American Progress, a progressive group. “There’s only so long that these businesses can hold out before it just doesn’t become feasible.”

The rebound in jobs has not been shared equally across groups. The unemployment rate for white workers has fallen more than four percentage points over the past two months, to 10.1 percent. For Black workers, the rate has fallen just over one point, to 15.4 percent, and the rate for Black men actually rose in June. Asian workers, too, have seen only small gains. Latinos, hit particularly hard when the pandemic shut down much of the service sector, have had a larger drop in unemployment, but their jobless rate remains elevated at 14.5 percent.

The good news is that the strong job gains in May and June suggest that the permanent economic damage so far has been relatively limited, in part because of the trillions of dollars of emergency spending authorized by Congress. June’s gains were concentrated in industries like restaurants and retail that were battered in the first phase of the pandemic, but construction, manufacturing and professional services brought back workers as well.

Assessing the scope of the pandemic’s nationwide economic damage has proved difficult, with varying estimates of the number of people out of work. Some 30 million were collecting either state or federal unemployment benefits as of mid-June, for example, a figure roughly double the 15 million payroll jobs lost since March.

Economists say the gap is partly explained by differences in what the two sources measure: The monthly payroll figures include only employees, not independent contractors and self-employed workers, who can receive federal unemployment benefits under the emergency programs created by Congress. But unemployment offices have also been troubled by backlogs and data-collection issues, and some states say they have been double-counting people filing for federal benefits. A rough reconciliation of the various sources suggests that roughly 25 million people were still out of work because of the virus in mid-June.

Michael Gapen, chief U.S. economist at Barclays, said that whatever the caveats, Thursday’s report was an encouraging sign that the job market was gaining ground before coronavirus cases began to surge again.

“It was a very strong month in the labor market, and the reopening of state economies has led to sizable re-employment,” he said.

Hand & Stone, a national chain of massage studios and facial spas, survived the shutdown more or less intact. By Monday, 420 of its 465 locations had reopened, with 35 more expected to do so by the end of this month. Only a handful of locations have closed permanently. And about 70 percent of members continued paying monthly dues during the shutdown, banking massages for the future rather than canceling their contracts.

Todd Leff, the company’s chief executive, said that so far, at least, customers seemed comfortable going back, in part because of strict safety procedures the company had put in place. Sales at open locations are about 22 percent below where they were a year ago, and close to 80 percent of workers at those locations are back on the job. But Mr. Leff said he was still cautious about the longer-run prospects.

“I see a quicker recovery than I think others are projecting and, at least in my industry, less businesses closing permanently,” he said. “But if it goes another 60 days, that could change.”

With so much uncertainty, many employers are remaining cautious. Nearly 150,000 of the positions created in June were temporary jobs.

“We’re seeing hesitancy on the part of employers to make permanent job offers,” said Amy Glaser, a senior vice president at the staffing firm Adecco.

For those still out of work, the job market remains daunting, particularly for those laid off early in the pandemic, who have now been out of work for months. Juliana Jacobs was let go as a designer of women’s tops at New York & Company in late April and has seen scant openings since then.

“Most of my friends in design have been laid off or furloughed,” she said. “I know very few who are working or have been brought back.”

Ms. Jacobs, who lives in New York City, has taken the time to update her LinkedIn profile, along with her portfolio and résumé. She applied for unemployment benefits in late April but hasn’t been able to get through after her file was marked “pending” on the New York State Department of Labor website.

“There really isn’t anything out there right now,” she said. “Most businesses are either just beginning to reopen or reopening with a reduced staff.”

Jeanna Smialek and Jim Tankersley contributed reporting.