US jobs recovery may be short-lived as coronavirus comes back with a vengeance
The US economy added 4.8 million jobs in June, with the unemployment rate declining to 11.1 percent as business resumes. However, a surge in new infections is expected to slow the reopening of the economy.
The jobs report was released a day earlier than usual because of the Independence Day holiday. The jobs growth figure is better than the three million expected by the economists. The growth marked a big leap from the 2.7 million in May, which was revised up by 190,000. The June jobs total is easily the largest single-month gain in country’s history.
The survey, which comes from the middle of the month, did not account for the suspension or rollbacks in regions hit by a resurgence in coronavirus cases. Leisure and hospitality sector again accounted for the biggest jump, accounting for about 40 percent of the total growth.
Retail also saw a significant gain of 740,000 jobs. Education and health services employment rose by 568,000, while manufacturing jobs were up by 356,000.
Barclays economist Michael Gapen pointed to “the possibility that the burst in employment was temporarily fueled by [Paycheck Protection Program] lending requirements that simply pulled forward hiring that was previously expected in June.”
“If so, this would suggest that the surge in May hiring was more of a one-off event and we could see some give-back in June employment,” he said in a note seen by Yahoo Finance.Also on rt.com US drug maker says its coronavirus medication will cost up to $5,700 per treatment
US Federal Reserve Chair Jerome Powell this week acknowledged the rebound in activity, saying the economy had “entered an important new phase and [had] done so sooner than expected.” However, he cautioned that the outlook “is extraordinarily uncertain” and would depend on “our success in containing the virus.”
The reopening of businesses has unleashed a wave of coronavirus infections in large parts of the United States, including California, Florida and Texas. Several states have even paused re-openings since late June, sending some workers home.
“As the economy is reopening, a lot of the jobs lost have come back and activity is coming back as well,” chief US economist at TS Lombard in New York Steven Blitz told Reuters. “The problem is the virus still has a big say in determining the trajectory of the recovery,” he said.
The US reported almost 50,000 new coronavirus cases on Wednesday, the fifth single-day case record in eight days. North Carolina, Tennessee and Texas also hit daily records, with Texas seeing more than 8,000 new infections.
The United States is the country hardest-hit by the coronavirus pandemic, with over 2,780,000 people infected and more than 130,000 dead.
For more stories on economy & finance visit RT's business section