US non-farm payrolls smashes consensus for 2nd month in a rowOn July 2, 2020 by Thomas Belayneh
Today, the US Bureau of Labour Statistics’s data showed that 4.8m Americans found work in the month to 12 June, whilst last month’s release was revised upwards to 2.7m from 2.5m. The report significantly cleared consensus expectations of jobs growth of 3m and caused European stock bourses to surge almost 1% higher in reaction to the phenomenal news.
Gains in employment were again led by the beleaguered leisure and hospitality sector, driven by a resurgent rise of 1.48m jobs in food services and drinking places. The sector led last month’s report with 1.4m in jobs growth and again led this month’s report with an even higher 2.1m in jobs growth.
The other particularly hard hit sector during the pandemic, Retail, came in at a not-so-close second with 740k in job gains confirming the positive effect that loosening restrictions has had on these types of businesses. As expected, gains in this sector were driven by an increase of 201,000 employed in clothing and clothing accessories stores.
Caution must be exercised over the huge gains seen in the leisure, hospitality and retail sectors, however. The reporting period falls short of recently announced reversals in reopening plans in states like Florida and California, where these sectors account for a relatively higher proportion of all employed relative to other US states.
In Florida, bars have been ordered to close completely and restaurants have been asked to reduce capacity from 75% to 50%, so one can only imagine the devastating impact this will have in cities like Orlando and Miami.
The mining and logging sector continued to see employment declines after 53k and 19k lost their jobs in April and May, respectively.
During this reporting period, a further 10,000 workers lost their job as mining and logging became the worst performing sector. It was among only two sectors which saw employment falls with the other being utilities where 3,200 jobs were lost in the month to 12 June.
Mining and logging, however, should see a tailwind in its activity in the months ahead after US agriculture secretary, Sonny Perdue, asked the US Forest Service to reduce the burden that regulations place on the development of federal land for national resources extraction.
Turning to the unemployment rate, this fell 2.2% to 11.1% in June, whilst numbers unemployed fell 3.2m to 17.8m. Although still more than double February’s level, the number of those working part-time who are willing but unable to find more hours has declined by 1.6m to 9.1m.
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