US economy adds a record 4.8 million jobs in June

Unemployment rate falls to 11.1 per cent

US economy adds 4.8 million new jobs in June                                 

The US economy added 4.8 million jobs in June, the most positions since Labor Department records began in 1939.

Economists surveyed by Bloomberg had expected this month’s figure to come in at around 3 million, up from the 2.5 million added to the American labour market in May.

With this surprise surge, the US unemployment rate fell to 11.1 per cent, 1.4 per cent lower than experts had predicted. In April, after it almost completely locked down to prevent the spread of Covid-19, the unemployment rate in the world’s largest economy rose to its highest level since the Great Depression at 14.7 per cent.

Of the 4.8 million figure, 2.1 million were in the leisure and hospitality industry, 740,000 were in the retail sector, 568,000 were in education and healthcare and 357,000 were service jobs.

Hailing the “historic numbers”, US president Donald Trump was keen to stress the 356,000 manufacturing jobs added to the American economy, stating: “Manufacturing looks like it's ready to really take off at a level that it’s never been. And a lot of that has to do with our trade policy because we’re bringing manufacturing back to our country.”

The president observed: “The stock market is doing extremely well, which means to me jobs.”

Although the latest figures did trigger a 400 point jump when the Dow Jones opened, much of this momentum was lost. By the close of trading the Dow traded up only 0.36 per cent, the NASDAQ up 0.52 per cent and the S&P500 up 0.45 per cent.

The recent spike in coronavirus cases in a number of US states arguably contributed to this measured reaction. Earlier this week, the state of Texas alone had more daily Covid-19 cases than Italy when it was a global epicentre of the pandemic.

Firms in key states, such as California, Florida and Texas, are now expected to dial back or delay reopening due to this long-feared second wave, this would have a concomitant effect on future job growth.

 

FURTHER READING: American Airlines is overstaffed by about 8,000 flight attendants and warns of job losses

FURTHER READING: US mortgage delinquencies hit nine-year high

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