The state’s unemployment rate dropped in June in line with the national rate, with both reflecting the continued increase of economic activity that coronavirus precautions had curtailed in March and April, according to information released Friday by the Maine Department of Labor.
The rate declined 2.7 percentage points to 6.6 percent. The data are based on information collected from June 7 to 13. Nonfarm payroll jobs rose by 19,000 in June and by 33,200 in the past two months, the largest monthly gain on record, but there were still 73,000 fewer jobs in that category than in February.
The unemployment estimates continued to understate the extent of the coronavirus’ impact on the workforce, said state labor economist Glenn Mills. One reason is that participation in the labor force has dropped significantly, with 28,900 fewer people than in February. Another reason is that people interviewed for the unemployment survey were misclassified, meaning the actual unemployment figure is around 12.4 percent, he said.
Two new factors could affect the unemployment rate going forward. One is whether Congress extends the $600 per month in additional federal unemployment benefit, which has kept some people from searching for or returning to work as they have made more staying on unemployment. The other is that jobless claimants in Maine will have to provide information on work search activity to the state starting the week of Aug. 9.
“That could change some behavior that could end up being reflected in the unemployment rate,” Mills said, though data on those changes won’t be reflected until September, meaning it will be publicized in October.
Portland and South Portland saw the most job gains in June, rising 6.8 percent from May to 186,400. That is still 13 percent lower than the 214,400 jobs in that area in February. The Bangor area saw jobs rise 0.7 percent in June to 46,800. Lewiston-Auburn saw a 1.7 percent rise in jobs to 62,100.
Oxford saw the highest unemployment rate of any Maine county at 8 percent. Cumberland ranked 4th at 6.7 percent, Androscoggin 5th at 6.7 percent and Penobscot 7th at 6.2 percent. Sagadahoc County had the lowest rate at 5.4 percent.
All of the jobs gained from May to June were in the private sector. The hard-hit leisure and hospitality sector saw jobs increase 5.9 percent to 40,800, but that’s down from the 69,900 jobs in the sector in February. The healthcare and social assistance sector saw jobs rise 6 percent to 107,300. Construction, mining and logging was the only private-sector segment to lose jobs, down 0.5 percent to 31,000.
While the unemployment rate fell, jobless claims were up in the state last week, but state labor officials said they are investigating whether that could be linked to fraud. Mainers submitted about 8,000 new jobless claims to the state for the week of July 5 to July 11, according to data released Thursday by the labor department.
Nationally, the unemployment rate declined 2.2 percentage points to 11.1 percent and the number of unemployed people fell by 3.2 million to 17.8 million in June, according to figures released by the U.S. Bureau of Labor Statistics on July 2.
The unemployment rate was lower in 42 states in June. It rose in Massachusetts, which had the highest jobless rate at 17.4 percent, while the New England average was 13.4 percent, according to the bureau. Maine’s rate was the lowest among New England states.
Although unemployment throughout the country fell in May and June, the jobless rate and the number of unemployed people were up by 7.6 percentage points and 12 million, respectively, since February.
Unemployed people nationwide who were on temporary layoff decreased by 4.8 million in June to 10.6 million, following a decline of 2.7 million in May. The number of people permanently losing their job continued to rise, increasing by 588,000 to 2.9 million in June.
Mills said he doesn’t have comparable numbers for Maine, and questioned the accuracy of such figures since so many factors are changing. Congress is expected to reconvene next week to take up another virus aid package.
“If Congress comes up with a package that saves hundreds of thousands of companies that would have failed, then many of those layoffs will not be permanent and it’s simply not knowable at this point,” Mills said.
Maine’s July workforce estimates will be published Friday, Aug. 21.