By Sarah Chaney

Unemployment fell and the U.S. economy regained 4.8 million jobs in June, but the recent surge in coronavirus infections could throw the recovery off course.

The job growth followed May's payroll gain of 2.7 million and showed people were getting back to work and the economy was healing faster than anticipated. Still, the U.S. labor market is operating with about 15 million fewer jobs than in February, the month before the pandemic struck the U.S., while the country faces an increase in coronavirus cases that has led some states and businesses to change course on reopenings.

There already are signs the economy could be affected by the virus surge that started in late June, after surveys were completed for the jobs report. Restaurant seating in several large cities declined at the end of the month and credit-card spending eased, said Sung Won Sohn, an economist at Loyola Marymount University.

Mr. Sohn said the data suggested that consumers, the driving force behind the U.S. economy, started to grow cautious as cases increased. "Normally we should be celebrating a gain of 4.8 million jobs, but there are dark clouds ahead of us dashing hope of a V-shaped recovery," he said.

The June unemployment rate fell to 11.1% from 13.3% in May, even though there were significantly more workers who were accurately counted as unemployed in June compared with previous surveys during the pandemic, according to the Labor Department.

U.S. stocks rose as the employment figures brought reassurance that the economic recovery was continuing.

Still, the jobless rate remains at historically high levels. Until March, before the pandemic drove the U.S. into a deep recession, the unemployment rate was hovering around a 50-year low of 3.5%.

Hiring last month was supported by business reopenings and government aid. States across the U.S. reopened restaurants, gyms and salons that had been shut for several weeks to contain the virus's spread. Small businesses that tapped federal loans through the Paycheck Protection Program continued to recall workers.

Job gains in leisure and hospitality -- a sector hard hit by the shutdowns -- accounted for about 40% of June's employment growth. Restaurants and bars were the main driver. But those workers are particularly vulnerable to renewed layoffs because a recent rise in cases in several states is causing governors to halt or roll back reopenings.

In recent days, Texas required that bars close and Florida imposed new restrictions on bars. New York City delayed the reopening of indoor dining at restaurants. Thursday's jobs report, which is based on survey data largely collected in mid-June, doesn't reflect those recent government-mandated business closures and related layoffs.

The number of new applications for jobless benefits -- a proxy for layoffs -- fell by 55,000 to 1.43 million last week, the Labor Department said in a separate report Thursday. The number of people receiving unemployment benefits, meanwhile, rose slightly by 59,000 to 19.3 million for the week ended June 20.

Unemployment claims have come down from a peak of nearly seven million in late March but have stabilized near a historically high 1.5 million, an indication that companies continue to cut jobs.

"We're in the beginning of a slow recovery," said Marianne Wanamaker, a labor economist at the University of Tennessee, who previously served as an economist in the Trump administration. "I think the recovery will stall out if we don't get control of the virus."

The Congressional Budget Office, in new economic forecasts released Thursday, said it expected the unemployment rate to fall to 10.5% by December, down from an earlier forecast of 11.5%.

Gross domestic product, a broad measure of economic output, is expected to climb 12.4% in the second half of the year, but not enough to offset the losses from the first half of the year, the report said. GDP is projected to shrink 5.9% in the fourth quarter compared with a year earlier, CBO said, and grow 4.8% next year.

Worker shifts rose 2.4% in the week ended June 28 from the prior week, but the gains were smaller in some states where coronavirus cases rose. Shifts last week increased 1.8% in California, 1.6% in Texas and 0.6% in Florida, according to Kronos, a Massachusetts workforce management software company.

Tubing rental company Texas Tubes won't be open to send customers floating down the 2-mile Comal River this Fourth of July weekend -- normally one of the busiest times of the year for the New Braunfels, Texas, company.

Last week it had to cease operations and lay off its staff of about 30 when Gov. Greg Abbott ordered the halt of water-recreation outfitters, said Texas Tubes' owner, Coley Reno.

"Our season is only so long, so if this thing goes to September, then we're done for the year," Mr. Reno said. He added that the tubing center's closure would hit the small Texas city's tourism economy because there would be fewer out-of-town guests to dine at restaurants and sleep in Airbnbs.

Employers in sectors such as retail, health care and manufacturing added jobs in June. Companies recalled workers who were temporarily laid off due to the pandemic, helping drive down the number of unemployed Americans on temporary layoff by about five million from May to June. Meanwhile, the number who permanently lost their jobs rose by about 600,000 over that period.

At the beginning of the pandemic, customer traffic declined and hiring froze at Teriyaki Madness, a Denver-based franchised restaurant chain.

"But then people kind of woke up and said, 'This could last for a while, '" said Michael Haith, the company's chief executive.

Consumers started ordering more online and driving in for curbside pickup of teriyaki chicken-and-rice bowls, helping boost same-store sales. Now the fast-casual chain is adding 10 stores that will need 25 employees each in positions such as cook, cashier and general manager.

President Trump celebrated the employment figures. "Our economy is roaring back," he told reporters at the White House, adding that he was "really happy."

Mr. Trump said voters should be wary of replacing him in the November elections, saying that doing so would hurt the economy. He played down economic threats from the increasing spread of coronavirus. "The crisis is being handled," Mr. Trump said.

Former Vice President Joe Biden, the presumptive Democratic presidential nominee, in a statement said the president was ignoring the recent rise in coronavirus cases and overall state of the economy.

"We're still in a deep, deep job hole because Donald Trump has so badly bungled the response to the coronavirus and now he has basically given up on responding at all," Mr. Biden said. "There's no victory to be celebrated. We're still down nearly 15 million jobs and the pandemic is getting worse."

Declines in unemployment last month were uneven across racial groups. The jobless rate for white workers fell 2.3 percentage points to 10.1% in June. The unemployment rate for Black workers decreased 1.4 percentage points to 15.4%. The rate for Latino workers fell below that of Black workers, declining 3.1 percentage points to 14.5%.

The economy entered a recession in February and appeared to begin a recovery as early as April. The speed at which businesses hire and consumers spend depends, in large part, on the course of the virus. Many Americans remain hesitant to shop in stores or eat at restaurants as cases increase.

Stephanie Casebeer, 45 years old, has been temporarily out of work during the pandemic as a group fitness instructor at Miami-area gyms.

She said many of her students have indicated they aren't ready to return to in-person workouts, and gyms have continued to delay reopening yoga and cycling classes as coronavirus cases in Florida rise. She worried it would be tough financially for gyms to rely on virtual classes.

"It's made me nervous," she said. "How am I going to make my living doing what I enjoy for the next couple of years?"

Ms. Casebeer said she is eager to return to teaching classes even though she makes more on unemployment benefits, which include an extra $600 a week from a federal stimulus bill, than she would as a group-fitness instructor.

"I like what I do enough to not necessarily care about keeping the extra $600," Ms. Casebeer said. "I want to go back to work, and I want to go back to work safely."

The June jobs report will likely inform congressional debate over the next federal coronavirus relief bill. Republicans and Democrats have been at odds over whether to extend the additional $600 a week in jobless benefits, scheduled to run out at the end of July.

Republicans have pointed to stronger-than-expected job growth as evidence workers no longer need expanded unemployment benefits. Democrats have argued that millions of people remain jobless and need extended aid to keep paying bills.

Some small businesses are already running through loans from the Paycheck Protection Program, which was designed to help companies keep workers on payrolls.

"Many owners received their loans in April and can no longer afford to keep workers past June," the National Federation of Independent Business said.

Jennifer Cumming owns Foundational Concepts, two physical therapy clinics in Overland Park, Kan., and Kansas City, Mo. She was able to use the federal small-business loans to rehire employees this spring after they were furloughed at the onset of the pandemic.

But when the federal funds -- which lasted eight weeks -- expired in mid-June, Ms. Cumming wasn't able to guarantee stable paychecks for three of the company's 10 employees, who quit as a result. Ms. Cumming said she didn't plan on immediately replacing all of them, given the recent climb in coronavirus cases in her area.

"We want to be smart and not overextend ourselves," she said.

--Eric Morath contributed to this article.

Write to Sarah Chaney at sarah.chaney@wsj.com

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07-02-20 1610ET