US recovered 3 million additional jobs in June, with forecasts will reach 8 million.
Investors have already been duped once after several million people returned to work in May. They may still be fooled in June, but they fear the next surprise may not be as pleasant.
Wall Street DJIA, -2.83%
United States recovered 2.5 million jobs in May, confusing expectations of another big drop, although the Labor Statistics Office He also said that all states had started to reopen their economies to some extent last month and that 2.7 million people who had temporarily lost their jobs during the pandemic had returned to work.
Related Downloads:
The unemployment rateMeanwhile, we see it drop to 12% against 13.3% when the Ministry of Labor publishes monthly data next Thursday, a day earlier than usual due to July 4 which was held Friday of this year .
The appearance of optimism regarding the June forecast cannot however hide bitter doubts.
On the one hand, the number of new unemployment claims has not yet fallen below 2 million per week since the start of the pandemic in March. Some 30 million people were still receiving benefits
earlier this month. And an increase in coronvirus cases in early June prompted individuals, businesses and governments to become more cautious.
Any increase in employment well below 3 million would be seen as a bad sign, reinforcing the widely held view that the recovery that started in May should be fairly eventful. The United States lost a record 22 million jobs in the first two months of the pandemic And the economy cannot return to something close to normal until most of these people return to work.
However, even if employment growth meets or exceeds the Wall Street target, anxiety will not subside until the recent explosion of coronavirus cases. New outbreaks in states that were among the first to reopen, such as Florida and Texas, again raised alarms and prompted governors to press the pause button to allow businesses to reopen.
“Reopening the economy will not be a linear process, week after week. There will be setbacks, ”said chief economist Chris Low of FHN Financial. “Every city and every state will have to return to normal.”
The employment report highlights a busy day before the July 4 vacation in the United States. At the same time, the government will publish the latest tally of the first unemployment claims.
Unemployment claims have not fallen as quickly as expected, which raises questions not only about the strength of the recovery, but also about the quality of the data. Some economists say the report is riddled with overcharges due to repeated submissions from the same people and the inability of overworked state unemployment offices to handle the large number of claims.
Earlier this week, Wall Street will closely monitor consumer confidence data, car sales and a report from ISM purchasing managers on the manufacturing sector. Investors will also examine the Federal Reserve minutes of their June meeting to find out if the central bank plans to step up its efforts to support the economy.