Jobless Rate Falls For Second Straight Month, Upwork Economist Says Slow Recovery Ahead

The national unemployment rate was 11.1% in June, the Bureau of Labor and Statistics said Thursday, and the number of unemployed persons fell by 3.2 million to 17.8 million

What Happened: The national unemployment rate decreased 2.2% from the reported 13.3% rate in May. 

The number of permanent job losses is continuing to rise, increasing by 588,000 to 2.9 million in June.

Why It’s Important: Adam Ozimek, the chief economist at Upwork Inc

UPWK, is looking at net — not gross — labor market flows. 

Underneath a rapid rebound in payrolls, businesses are still failing, shrinking and turning temporary job loss permanent, Ozimek told Benzinga in an email. 

These are the ingredients of a slow recovery, he said. 

The rising number of those permanently losing their jobs can not be overlooked, as this dynamic can create economic hardship in the long run, the economist said.

Ozimek also cautioned that it’s unlikely that permanent job loss has peaked.

Recent analysis has found that unemployment is not affecting all demographics equally.

Unemployment rates for Asians, African Americans and Hispanics are notably higher than for their white counterparts, according to a Pew Research report.

Employment in leisure and hospitality increased by 2.1 million, accounting for about two-fifths of the gain in total nonfarm employment in June. 

Late Tuesday, the U.S. Senate extended the Payment Protection Program though Aug. 8, only hours before the program was set to expire.

What’s Next::Expanded unemployment insurance. All eyes will be on whether the government extends the federal unemployment insurance program that was expanded for COVID-19 events. 

It is important to note that the unemployment rate may be a little higher than what is reported. The BLS has reported misclassification issues with those who  respond to the survey. If these issues are valid, the unemployment rate could be even higher than government figures show.