The US economy added 4.8m jobs in June, the biggest increase since records began in 1939, in the latest sign that the country is rebounding sharply from the depths of the coronavirus crisis in April.
The unemployment rate fell to 11.1 per cent in June – still extremely high by historical standards – from 13.3 per cent in May. Analysts had predicted a fall to 12.3 per cent.
However, the US’s economic recovery is far from guaranteed. Coronavirus cases are rising rapidly across the country, prompting states such as Texas and Florida to pull back from plans to reopen.
Nonetheless, the news will cheer policymakers and President Donald Trump. The rebound in the US jobs market has shocked economists, who were almost all forecasting a far worse performance.
Last month, the unemployment rate dropped to 13.3 per cent in May from 14.7 per cent in April. This confounded analysts who had predicted it would surge to 19.8 per cent.
“Today’s upbeat US jobs report will build upon the market’s positive momentum from last month’s data,” Richard Flynn, UK managing director at Charles Schwab.
Yet Flynn pointed out that the headline figures mask some weakness in the economy. “Continued jobless claims over the past few weeks suggest that many job losses may become permanent as businesses struggle to reopen and unused resources and skills become outdated.”
“A labour market recovery may be further endangered by the latest spike in infection rates in various states,” he said.
The jobs data from the Bureau for Labor Statistics showed that black people are more likely to be unemployed than white people in a country that has been convulsed by protests over racism over the last two months.
The unemployment rate for black Americans is 15.4 per cent, for Hispanic people it is 14.5 per cent but for the white population it is 10.1 per cent.
Average hourly earnings fell by 1.2 per cent, quicker than the 0.7 per cent fall economists were expecting.