June Jobs Report
A Second Month of Upside Surprises
Key Takeaways
- US nonfarm payrolls rose by 4.8 million jobs in June, a stronger result than the consensus median forecast of a 3.2 million gain. In addition, the payroll gain for May was revised upward by about 190,000.
- Manufacturing employment rose by 356,000 in June, building on the 250,000 May add, as more firms reopened.
- The jump in the jobless rate exceeds the 10% rate of the Great Recession of 2008-09.
- The “underemployment” rate eased back to 18% from 21.2% in the prior month in a sign that some part-time workers have returned to full-time employment.
In our view, these much better than expected results suggest that the US economy in the second week of June was rebounding strongly. The recent resurgence in the COVID-19 virus notwithstanding, economic data now shows even more than before that the equity market knows where it wants to go and likely where we are headed. To mix our metaphors: We see a light at the end of the tunnel even if we’re not out of the woods yet.
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