June 2020 Unemployment Statistics Released

Core Financial PartnersEconomy

June 5 2020 Unemployment Statistics
Unemployment figures released on June 5, 2020 were a big surprise as companies hired 2.5 million workers in May 2020 and the unemployment rate fell 13.3%. Hiring was strong across the private sector with the biggest e change in the Service Sector as restaurants, hotels, and other travel and leisure businesses hired back employees.

There are two theories for strong Service Sector hiring:

  1. A byproduct of the Paycheck Protection Program (PPP) launched in April 2020, as companies hired back previously laid off employees to take advantage of the loan forgiveness provisions.
  2. The reopening of the economy is generating enough demand for employers to hire back some of their workforce, suggesting a quicker recovery that initially forecast.
While the June 5 number was optimistic, unemployment is still at 13.3% and most projections are for rehiring to be slow. The Federal Reserve announced that they expect unemployment to still be at 9.3% at the end of the year which is extremely high. Also, once expanded unemployment benefits end in July, it is likely that high unemployment will have a more dramatic impact to the economy slowing a potential recovery.