The U.S. economy continued its strong bounce-back by adding 4.8 million jobs in June, but some are warning that the numbers don’t reflect a potential downturn due to the recent surge in the coronavirus cases.
What’s the good news?
The nearly 5 million jobs added in June make it the second consecutive month of gains after more than 20 million jobs were lost in April alone due to widespread COVID-19 shutdowns. The unemployment rate also dropped to 11.1%, down from its high of 14.7% in April.
According to CNBC, the jobs report smashed expectations, as economists surveyed by Dow Jones had been expecting only 2.9 million jobs to be added and the unemployment rate to only drop to 12.4%.
“Today’s announcement proves that our economy is roaring back. It’s coming back extremely strong,” President Donald Trump said of the numbers in a news conference Thursday morning.
“This is the largest monthly jobs gain in the history of our country,” he added.
The president also highlighted the sharp drop in black unemployment, which fell from 16.8% to 15.4%, saying, “these are historic numbers.”
What’s the bad news?
However, most mainstream news outlets are reporting that since the Labor Department survey comes from the middle of the month, the numbers don’t accurately reflect the state of economy.
Several states across the southern and western regions of the U.S. have experienced a marked uptick in confirmed COVID-19 cases in the last couple weeks. The surge in cases, experts say, may have a negative effect on the economy heading into July.
“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, according to CNBC. “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.”
“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.
Despite the ominous headwinds, the stock market reacted favorably to the news, NPR noted. The Dow Jones Industrial Average shot up by more than 400 points Thursday morning.
While discussing the stock market bump, Trump reportedly remarked: “This is not just luck, what’s happening. This is a lot of talent.”
The leisure and hospitality job sector reported the biggest gains, adding 2.1 million jobs, which accounted for roughly 40% of the total economic growth.
Other sectors reporting sizable growth were retail, education and health services, and manufacturing.