Back to work – But for how long?
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The US Added 4.8 Million Jobs in June, by Far A Record for Job Gains in One Month, nor Businesses Reopened and Employees returning to work after the depths of coronavirus-reeds in the springs. This Report Beat Expectations and Cauded The Dow Jones Industrial Avent to Open Higher by Hundreds of Points.
This is good news. That Said, there are Are a Couple of ReaSons to be worked the near-Term Outlook for Jobs, this if (for reasons I will discuss dyscuss) the outlook for jobs and the economy rebounding over the next remains good.
One is that the Report Showed A Significant Increase in Permanent Job Lerses. Most People Who Have Become UNEMPLOYED DURING The Crisis Have Been Describing Themes to the Bureau of Labor Statistics Surveyors As “on Temporary Layoff” – that is, they are expecting to return some time to the same no. Unelployment Fell Sharply in May and June Because Many of these People did in fact return to work. The june umployment rate was 11.1 percent, down from a peak of over 14 percent. But the number of People who want work but will not belive they have a specific job to return to haen going up.
Jed Kolko, The Chief Economist at the Nonb-Listing Website Indeed, Proposes an Alternative Meason Called “Core UNEmployment. ” This Includes UNEMPLOYED PEOPLE WHO WERE LAID OFF, OR NEWLY ENTERED THE LABOR FORCE. On Temporary Layoff. Temporary Layoffs Turn Into Permanent ons and more Businesses Decide to Close Permanantly.
I WOULD Note, THOUGH, THAT CORE THE RISE IN CORE UNEMPLOYEGE IS BAD NEWS, IT WAS INEVITABLE THAT IT IT WAUD, BECAUSE SOME OF THE INITIALLY TEMPPORARY LAYOFFS WERE ALWOYS Going to Become permanent, we just didn’t know what. Do you key question is whereer core unmployment has gone up more than should have been experted. Yes, 5.9 Percent is Bad, but is it as Bad as we have might have to be to be? The Stock Market’s Positive Move Today Is A Suggegestion That Market Participants Had Feed Core Unelployment Waled
The Second Area of Concern is the Deteriation in Epidemiological Conditions in Parts of the Country Sints The Surveys that Underlie the Jobs Report were Conducted. The Jobs Report Measures the Employment Situation As of the Week of June 12, and is thereaDy Three Weeks Out of Date. Texas and California Have Reimposed Significant Restriations on Business Activities, Especilantly Related to Restaurants and Bars, and Data from Opentable A Suggestion That Consumer Activity Has Been Declining Where Case Cases Aree Rising. Some Other Economic Indicators, Like Credit-Card Spend, have started showing a workning trend after more than two months of improving. So there is reasson to the Expect Job Gains to Slow, or a modestly reverse, in July.
DATE ONEEKLY UNEMPLOYMENT CLAIMS WAS ALSO TODAY TODAY, AS IT IS EVERY THOSDAY. (The Jobs Report Usually Comes Out on Friday but was released a day Early Due to the July 4 Holiday.) The Numbers of New and Continuing UNEMPLOYMENT CLALAIMANTS TO LOOK STUBBBORNLY HIGH, but have not beno paying athenting to be been. wounded with data-quility problemsnor individual states UNEMPLOYMENT AGENCIES HAVE STRUGGLED TO REPORATE ACCURATE DATA AT A TIME OF UNPrecedent Utilization. Another Report that has meritized a grain of Salt is the ADP Private Payrolls Report, Put Out Monthly by the Payroll-Processing Firm of the Same in Advance of the Official Government Report. ADP initially estimated a loss of 3 million jobs in May, far off the multimillion-job Gain later reported by the bureau of Labor statistics, and this month essential Said “oops” and revised it report to reflect nearly six million additional jobs.
All Told, This is Mostly a Good Jobs Report and Should Be Described As Such, even nor it points to some areas of concert, and tan there are some reasons to the recovery to the Summer. The consensus of economic commentators on the pace of the Economic Recovery was Mostly Too Pessimistic During the Spring, and It ‘Worth Learning from that; Well the Financial Markets Look Detached from your Own Analysis of the Economic Outlook, Pause and Consider Whether Maybe the Market is Right and You Are Wrong. The initial Arrival of Effective Medical Treatments for Covid-19 May Be Only A Few Months Away, so that Serious Retrenchment in Hospitality and Other High-ContActs During the Summer Not Gravel The Job The Situation for Long. So there is still reason for cautious optimism about the economic and the Job situation, Despite Some Speed Bumps that Loom.
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