Non-farm payrolls shot up 4.8 million in June, beating the street estimate of 2.9 million. The unemployment rate fell to a crisis-low 11.1 percent, beating the estimate of 12.4 percent.
And the number of workers who were on temporary layoff fell by 4.8 million.
But the report does not include numbers that reflect the fact that many states have paused or rolled back their openings in the last couple of weeks. That may affect numbers next month.
“The 4.8 million rise in non-farm payrolls in June provides further confirmation that the initial economic rebound has been far faster than we and most others anticipated,” said Michael Pearce, senior U.S. economist at Capital Economics. “But that still leaves employment 9.6% below its February level and with the spread of the virus accelerating again, we expect the recovery from here will be a lot bumpier and job gains far slower on average.”
Indeed, new jobless claims remained stubbornly high last week, with another 1.427 million Americans filing, above the estimate of 1.38 million, the Labor Department said in a separate report Thursday. Continuing claims actually increased by 59,000 to 19.3 million, highlighting the jobless problem likely exacerbated by the ongoing presence of the virus and its economic impact.
“This slowdown is going to have an impact, absolutely. How big is hard to say,” said Steve Blitz, chief U.S. economist at TS Lombard. “There are a lot of unknowns, and it would be silly on the fiscal side to pull back now on stimulus.”
The future looks a lot rosier than it did a couple of months ago. The gains in employment are only part of the story, as the economy seems poised to rev up to levels not seen before.
Citgroup economists say the composition of job gains suggests that hiring will continue to be strong, even if June might mark the peak. They said current forecasting models are too dependent on weekly claims data, which are distorted because workers hired part-time can still get benefits.
“A second consecutive large upside surprise to hiring relative to consensus confirms our view that the reopening rebound would be much more robust than most expected a couple months ago,” Citi economist Andrew Hollenhorst said in a note. “We are particularly encouraged by the composition of hiring, which shows potential for further large gains in manufacturing, construction, and healthcare jobs, which are relatively insulated from social distancing.
Do these numbers make it more or less likely that Congress will agree to another stimulus package? In an election year? Are you kidding?
Most economists are egging Congress on, urging them to put money in people’s pockets. But Republicans want a targeted stimulus bill — a scalpel instead of an ax. The universal business aid given in the previous stim bills should be dropped and only certain industries that are lagging need the cash injection.
It will be difficult, however, for Congress to agree on anything with Democrats already passing a massive $3 trillion Christmas tree that has something for everyone and a lot for a few favored constituencies. And, of course, plenty of goodies for the radical left and their culture war on America.
Democrats don’t want any part of a reasonable stimulus bill. Theirs is a campaign document, not a serious attempt to legislate. They are betting the house that they will take over the White House and the Senate and then legislate America out of existence.
So forget the stimulus. Go and vote in November.