June us employment data: recovery in may and June was too fast - CIBC

02.07.2020 19:22
CIBC Research comments on their reaction to the us employment data released today in June:
"The number of people employed outside of agriculture showed an impressive increase of 4.8 million in June, which is more than 1.5 million higher than the consensus forecast, although generally in line with our expectations. while employment growth was again tilted toward low-wage sectors that were hardest hit by the loss of employment in April, average hourly earnings fell 1.2% in the month. Employment growth of a similar scale in the household survey means that the unemployment rate fell to 11.1% (from 13.3% against the consensus forecast of 12.5%), despite a higher-than-expected increase in the share of the economically active population.
However, even with growth in June, the number of employed people recovered only about a third of the job losses during March and April. And, given that the number of COVID-19 cases is growing again in some parts of the country, leading to the postponement/reversal of plans to resume work, even a partial recovery in employment in may and June may be considered too significant and too early, relative to the spread of the virus. Some high-frequency data on employment and mobility, which have been the best benchmarks for the number of people employed outside of agriculture in recent months, have already begun to show a flattening of the previous trend of improvement during the second half of June(after the employment survey period ended). Moreover, today's figure for jobless claims was slightly disappointing, with both primary and continuing applications showing very little change from the previous week. While we still expect a positive figure in the July employment data, it will be significantly smaller in size."

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