The June Jobs Report & UI Claims Report in 6 Charts

Two major reports on the labor market were released today: the June jobs report from the Bureau of Labor Statistics and the weekly unemployment insurance (UI) claims report from the Department of Labor.

Overall, the reports showed a modestly improving labor market with steady job gains and declining unemployment. While we're still in a deep economic hole, these reports give us a little more confidence in the recovery. However, the surge in COVID-19 cases around the country should give us pause—a serious outbreak that forces states to reimpose restrictions or spooks consumers and businesses could derail the recovery.

Here are 6 charts outlining the key takeaways from today's reports:

[1] Unemployment Rate Improves

The unemployment rate dropped to 11.1%, better than expected but still over 10%, the Great Recession peak.

The BLS also made substantial progress in fixing the "misclassification error" with the upper bound on the error improving significantly from roughly +3pp to +1pp, indicating that it's not likely to be big factor in coming reports (Source: see question 11).

[2] Labor Market Adds 4.8 Million Jobs

While the big improvement is encouraging, it's important to remember we're still in a deep economic hole. The increase of 4.8 million only returns us to 2014 levels with 14.7 million jobs still missing relative to Feb 2020.

[3] Temporary Layoffs Fall, Permanent Layoffs Rise

On the one hand, it's encouraging that the vast majority of layoffs are still temporary. Most of the increase in jobs is coming from the rehiring of these furloughed workers.

However, permanent layoffs are ticking up as well. Even if all furloughed workers were rehired today, permanent layoffs are enough to set the labor market back several years.

As the recovery continues (and assuming no major surprises or shocks), expect temporary layoffs to fall but permanent layoffs to keep rising until the crisis is over and the economy has fully stabilized.

[4] Some Industries are Improving, Others Not so Much

Most industries improved in May. Initially hard-hit industries like leisure & hospitality and retail have bounced back faster as states relax restrictions on non-essential businesses.

However, the recovery is more sluggish in the government and information (includes media and tech) industries where gains have been muted. Workers in these industries are more able to work remotely, so the decline here likely represents more permanent losses from the effects of the economic slowdown rather than the lockdowns.

[5] Continuing UI Claims Rise Slightly

Continuing unemployment insurance (UI) claims rose slightly for the week ending 6/20. The number of Americans approved for UI benefits is now at 19.3 million, only showing moderate improvement over the last few weeks. The one-week rise is not an immediate cause for concern though since the weekly data is volatile and the overall trend is still downward. However, the slow recovery in this data is a sign that there is still a long way to go before we return to economic normal.

[6] Initial UI Claims Fall

Initial UI claims extended their 13-week streak of declines falling to 1.43 million. The rate of decline, however, has clearly slowed dramatically in the last few weeks. Weekly claims of over 1 million were unthinkable before the crisis began and a sign that layoffs are still happening on a weekly basis.

Claims are still falling even as COVID-19 cases rise, as it may take another few weeks for the economic impact of those rising cases to show up.

This post was adapted from this article from the Glassdoor Economic Research blog. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.