President Donald Trump welcomed new data on Thursday showing huge job gains in June.
Washington, United States:
President Donald Trump welcomed new data on Thursday showing huge job gains in June, but continued to play down the rise in COVID-19 cases that could reverse the temporary recovery.
Employers brought back 4.8 million people to work last month, two million in the hard-hit leisure and hospitality sector, reported the Ministry of Labor, which cut unemployment by two percentage points to 11.1%.
New data and the 2.7 million jobs recovered in May mean that the economy has recovered 7.5 million from the 22 million jobs lost since mid-March amid the coronavirus pandemic, as companies have been closed nationwide to prevent the spread of infections.
Speaking to reporters at the White House, Trump, who needs a strong economy to support his candidacy for re-election in November, went through the report line by line, claiming that some of the job gains were record – not to mention the massive losses suffered since March due to the pandemic.
“Today’s announcement proves that our economy is on the move,” said Trump.
“The crisis is being treated,” he continued. “It’s not just luck, it’s happening. It’s a lot of talent.”
He also applauded the surge in the US stock market, but left without answering journalists’ questions about the surge in coronavirus cases, or the news scandal that the US intelligence services believed that a Russian unit was paying bonuses to militants linked to the Taliban to kill American troops.
Welcome job news adds to positive signs in other reports that the world‘s largest economy is about to be corrected with massive government support for workers and businesses, which has also helped companies to re-hire certain employees.
But as the United States faces the world‘s worst coronavirus epidemic with more than 127,000 deaths and a record 50,000 new cases per day, economists fear renewed unrest as local authorities back down to return to normal before the pandemic and that companies are forced to close their doors again.
“Good news, bad news”
Job creation in June was much higher than economists expected and showed the rapid pace of earnings as the laid-off workers returned to their jobs.
Recreation and hospitality added 2.1 million jobs and retail trade increased 740,000 jobs, while manufacturing and construction also rehired in large numbers.
But a separate report from the Labor Department showed that job losses continued, as 1.43 million people filed for unemployment benefits last week, slightly less than the previous week.
Layoffs have averaged 1.5 million per week in the past four weeks, according to weekly claims data.
“The claims figures cannot be an afterthought. They indicate to what extent companies and governments continue to lay off workers,” economist Joel Naroff said in an analysis on Wednesday.
“We have to reduce that number dramatically, because it is clear that the reopening is not going as planned.”
The monthly employment report focuses on the week containing the 12th of the month, before the recent outbreak of cases.
And good numbers come with caveats.
The number of businesses and households used in the two-part survey remains lower than in the months before the pandemic, the Labor Department said.
The unemployment rate also continues to underestimate the real level of unemployment, which would have been above 12% if some workers had not been misclassified.
“Bleeding Jobs”
Gregory Daco of Oxford Economics called the report “a great summer cocktail”.
“However, this cocktail should be sipped with caution to avoid a bad hangover. In an attractive aspect, the job market is still facing a net loss of 14.7 million jobs due to the global coronavirus recession “, did he declare.
And he noted that the job market “is still bleeding jobs.”
The Secretary of the Treasury, Steven Mnuchin, recognized the persistent challenges.
“I am worried until everyone goes back to work,” he said.
He added that “there is no doubt” that government aid efforts are working, and repeated that he hoped to have a new aid package approved by the end of July.
The $ 2.2 trillion CARES law approved at the end of March included funding that helped employers rehire workers, and Mnuchin said he would rather extend it to help “especially affected businesses”.
