In June, total payroll employment rose by 4.8 million and the unemployment rate dropped to 11.1%. The June data indicate that labor market is recovering from the COVID-19 crisis, though the road to a full recovery may be long.
Residential construction employment rose by 83,200 in June to 2.8 million. Total construction industry (both residential and nonresidential) employment rebounded to nearly 7.2 million in June.
In the Employment Situation Summary for June, total nonfarm payroll employment increased by 4.8 million, following an increase of 2.7 million in May. The increases in May and June reflect the economy starts to recover from the COVID-19 pandemic. Monthly job changes in April and May were revised. The April monthly change was revised downward from an initial estimate of -20.7 million to -20.8 million, while the May increase was revised upward by 190,000 from +2.5 million to +2.7 million. After the economy lost 22.1 million jobs in March and April due to the impact of the COVID-19 pandemic, about 7.5 million jobs were created in May and June. Thus, total nonfarm payroll employment in June was 14.7 million lower than its February level.
Employment in leisure and hospitality, an industry that was hard hit in the COVID-19 pandemic, rose sharply in June. Retail trade, education and health services, manufacturing, and professional and business services also had the significant gains in June, while mining and logging continued to decline.
Meanwhile, the unemployment rate dropped to 11.1% in June, down from 13.3% in May. In June, the number of employed persons increased by about 4.9 million, while the number of unemployed persons declined by 3.2 million to 17.8 million. Among all the unemployed persons, about 60% classified themselves as on furlough or a temporary layoff and expected to be recalled back to work. The labor force participation rate, the proportion of the population either looking for a job or already with a job, rose by 0.7 percentage point to 61.5% in June, 1.9 percentage points below its February level.
The June decline in the unemployment rate and dramatic job gains amid the COVID-19 pandemic show early signs of recovery as states reopen and more people go back to work. These improving job situation is also a cause behind recent relative strength in housing demand.
Additionally, employment in construction continued to improve in June. Employment in the overall construction sector increased by 158,000 in June, after a revised increase of 453,000 in May. The number of residential construction jobs rose by 83,200 in June, after an increase of 224,200 in May.
Residential construction employment now stands at 2.8 million in June, broken down as 795,000 builders and 2.0 million residential specialty trade contractors. The 6-month moving average of monthly job changes for residential construction is -17,983 a month, mainly reflecting the largest job loss in April. Over the last 12 months, home builders and remodelers shed 83,900 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 834,200 positions.
In June, the unemployment rate for construction workers dropped to 12.0% on a seasonally adjusted basis, from 15.2% in May. The unemployment rate for construction workers has trended downward for the past ten years and remained at a relative low level in the beginning of 2020. The recent unemployment rate reflected the impact of the COVID-19 pandemic on construction industry.
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