The US economy gained 4.8 million jobs in June, better than expected. Data is from early June when the US economy was reopening at a rapid pace. A raging second wave of coronavirus cases is set to hit employment, including in the long term.
Non-Farm Payrolls beat expectations in June: Stocks rally, US dollar down
US Non-Farm Payrolls surprised to the upside once again, but doubts about the sustainability remain prevalent. Valeria Bednarik, Joseph Trevisani, and Yohay Elam discuss the market reaction, the state of coronavirus, politics, and more as a hot summer begins. Are the plumbers making progress?
US jobs report post-release checklist – Jul 2nd, 2020
|NFP Actual, Consensus and Deviation||Positive||The US economy added 4.8M jobs in June, a much better-than-expected figure, although still short of a V-shaped recovery.|
|NFP Revisions||Positive||May figure was revised slightly upwards, from 2.509M to 2.699M.|
U3 unemployment rate fell from 13.3% to 11.1%, while U6 underemployment dipped from 21.2% to 18%, both better-than-expected results.
|Labor Force Participation Rate||Positive||The share of people in the workforce rose from 60.8% to 61.5%, continuing the recovery started in May.|
|Average Hourly Earnings||Negative||As people in lower-income jobs gradually come back to work, the average wage figures also are slowly returning to usual ranges, down from 6.6% to 5%.|
July US JOBS REPORT PREVIEW
Perhaps a bit of sympathy is due the economists trying to predict the course of the labor market over the past three months. The novelty and excess of the employment collapse took econometric models far beyond historical precedent...
US Federal Reserve’s head Powell said that data had shown signs of improvement. The US is expected to show that it recovered 3 million jobs in June. The American dollar could fall with a positive report, mainly if Wall Street keeps running.
US jobs report pre-release checklist – Jul 2nd, 2020
|Previous Non-Farm Payrolls||Positive||After the worst US jobs report in history printed in April, NFP numbers bounced big in May showing a +2.5M number of jobs added.|
|Challenger Job Cuts||Positive||The number of corporate layoffs fell down from 397K to 170K in June, the best number since the COVID-19 outbreak.|
|Initial Jobless Claims||Negative||Initial Jobless Claims figures are falling very slowly, still printing consistent numbers way above 1 million a week. Not showing a V-shaped recovery there.|
|Continuing Jobless Claims||Neutral||The number of unemployment benefit receivers is also slowing down but failing to do so sharply, with a whooping 19.522M being registered on June 12th week.|
|ISM Non-Manufacturing PMI||Negative||Old data from May, as the June figure will be released next week, didn't show much life on the service sector employment sub-component.|
|ISM Manufacturing PMI||Neutral||Employment sub-component in the US flagship manufacturing survey recovered from 32.1 to 42.1 in June, but disappointed expectations, still not showing a V-shaped recovery.|
|University of Michigan Consumer Confidence Index||Neutral||UMich consumer survey index in June has shown some signs of life, bouncing from 72.3 to 78.1, but it is still way below pre-pandemic numbers.|
|Conference Board Consumer Confidence Index||Positive||CB consumer survey index bounced more notably in June, printing a much-better-than-expected 98.1 number.|
|ADP Employment Report||Positive
||ADP private employment report showed a gain of 2.369 million jobs in June, a bit lower than expected, but the May figure was revised way up higher: from -2.76M to 3.06M.|
|JOLTS Job Openings||Neutral||The lagging job openings indicator collapsed to 5M in April, still showing a more modest fall than expected. Numbers in May expected to tread waters around that level.|
June US JOBS REPORT REVIEW
Shocker – but a positive one – America is getting back to work, or at least receiving support while staying at home and remaining officially on the payroll. The Non-Farm Payrolls report for May was initially hard to believe – all those surveyed by Bloomberg and Reuters had foreseen a loss of positions in May and the US gained 2.509 million jobs.
The labor market collapse reversed in May as a totally unexpected gain in employment underlined the resilience of the American economy and the positive impact of the government’s efforts under the $2 trillion Payroll Protection Program to keep people at work. Non-farm payrolls rose by 2.54 million last month, a vast improvement from the 20.5 million who were furloughed in April and less than half the -8 million forecast.
May US JOBS REPORT REVIEW
The worst Non-Farm Payrolls report in history – 20.5 jobs lost and an unemployment rate of 14.7% – is shocking but investors were already bracing for disaster. The lockdowns imposed to curb the spread of coronavirus have taken their toll. The headline figures are devastating, but other statistics already paint an even darker picture.
The US labor market collapse in April surpassed all previous records for job losses but markets have already turned to the future as reopening states spur economic revival hopes. Payrolls dropped by 20.5 million, less than the 22 million estimate and the unemployment rate soared to 14.7%, the highest since 1939 and the end of the Great Depression and just before the Second World War rearmed the US economy.
April US JOBS REPORT REVIEW
"Like a hurricane hitting the whole country" – one of the reactions to the Non-Farm Payrolls report that showed a loss of 701,000 jobs, seven times worse than expected. The unemployment rate jumped from 3.5% to 4.4%, also worse than expected. It is the worst report since March 2009. The bad news may be only the very beginning, the tip of the iceberg.
American NFP shed 701,000 jobs in March, more that the worst loss during the financial crisis and surprising markets with the Labor Department’s ability to capture the rapid job losses. Economists had predicted just 100,000 firings, expecting the full accounting to be delayed until April as the US slows drastically from the economic impact of the Coronavirus.
March US JOBS REPORT REVIEW
The American job market looks great – or at least that was the picture in February. There is nothing not to like in the data. Non-Farm Payrolls rose by 273,000, smashing expectations, while wages advanced by healthy rates of 0.3% MoM and 3% YoY.
The Non-Farm Payroll (NFP) data for February was much better than expected, coming in with 273,000 jobs created vs a revised January number to 273,000 (from 225,000) as well. In addition, the unemployment rate declined to 3.5% in February from 3.6% in January.