The U.S. economy added 4.8 million jobs during the month of June as many businesses were able to open up partially or completely after coronavirus-related shutdowns.
The added jobs caused the unemployment rate to fall to 11.1%, which is far beyond the expectations of economic experts prior to the report. The stock market rose sharply at the strong economic news.
Experts were predicting that the economy would add 1 to 3 million jobs after 2.7 million were added in May. Economists had also predicted a further decline in jobs in May.
This means the economy is doing far better than experts had expected, and the Trump administration’s vision of a V-shaped economy may be closer to reality than most people had hoped.
Will a new surge in coronavirus cases lead to more economic turmoil?
Nearly half of the added jobs–2.1 million–were in the hospitality and leisure industry as people began to travel for vacations and eat in restaurants again. In addition, 740,000 non-essential retail jobs and 568,000 healthcare and education jobs came back as well.
President Donald Trump said that the economy was “roaring back” in remarks to reporters on Thursday and that it was also “very strong.”
While the news for June is good, economists are now worried that the recent spike in new coronavirus cases will eat into the recovery and slow things down again.
“By the time the June jobs report comes out, we will have already started estimating the damage to the labor market wrought by pullbacks and shutdowns of business because of an intensification of the pandemic,” Joe Brusuelas, chief economist at tax and audit firm RSM Joe Bruselas said in a preview of the jobs report earlier this week, The Hill reported.
Mnuchin: “Absolutely” no regret that US states reopened
Treasury Secretary Steve Mnuchin told reporters on Thursday that he had “absolutely” no regret about states that have reopened during the ongoing coronavirus outbreak, insisting that reopening is being done “safely.”
“I think we’ve had a very careful plan working with the states — this is primarily the states’ responsibility — but working with the states,” Mnuchin said, adding that “there is a safe way to reopen the economy, and we’re going to do it carefully.”
White House economic adviser Larry Kudlow said that states with spikes were in the process of developing “recovery best practices” to mitigate rises, which have largely been in younger populations, with few additional deaths, according to The Hill.
So far, states like Texas and California have shut down bars and nightclubs a second time to stop people from congregating in those indoor locations, often without masks or social distancing. Few of the new cases are ending up in hospitals because most are asymptomatic or mild.