Healthy June Jobs Report Hides Reality of Economic Situation as Coronavirus Lingers
“More than ever, we’re concerned about the worsening health situation and its impact on the burgeoning recovery. Rebounding mobility and poor use of protective equipment will make for a dangerous summer cocktail.”
At a White House press conference Thursday, President Trump alongside his two chief economic advisors celebrated a healthy June jobs report. Although the report did include 4.8 million job gains, spinning it in a positive light hides the reality of the American economic situation.
Trump Celebrates Healthy Jobs Report
“These are historic numbers in a time that a lot of people would have wilted. They would have wilted, but we didn’t wilt and our country didn’t wilt, and I’m very honored to be your president,” Trump said in a transcript published by Rev.
The president claimed it as a victory, declaring it “the largest monthly jobs gain in the history of our country.” The unemployment rate now sits at 11.1%, down from a peak of 14.7% in April.
“Today’s announcement proves that our economy is roaring back. It’s coming back extremely strong,” Trump said.
As the US continues to set new daily records for COVID-19 case, the president maintained that America has the situation “under control.”
“If you look, we were talking this morning, something to think about. China was way early, and they’re getting under control just now. And Europe was way early, and they’re getting under control,” Trump said. “We followed them with this terrible China virus. And we are likewise getting under control. Some areas that were very hard hit are now doing very well. Some were doing very well and we thought they may be gone and they flare up and we’re putting out the fires.”
Coronavirus Cases Continue to Threaten Economy
While the healthy June jobs report portrays a nation on the rebound, a surge of new virus cases in new regions of the US has forced states to reconsider their phased opening plans, Reuters reported.
“June may be the calm before the storm,” said Chris Rupkey, chief economist at New York-based MUFG. “We cannot be sure the labor market recovery will continue at a speed that is sufficient to put the millions and millions of Americans made jobless in this recession back to work.”
Notably, the June jobs report hides the reality of the economic situation because it lags two weeks behind; data was collected mid-June, before the new spike in virus cases.
Federal Reserve Chair Jerome Powell said the economic situation is predicated upon controlling the spread of COVID-19 and declared the future “is incredibly uncertain.”
Analysts at Oxford Economics and Goldman Sachs painted a more pessimistic outlook of the economic situation based on the rise in coronavirus cases.
“More than ever, we’re concerned about the worsening health situation and its impact on the burgeoning recovery. Rebounding mobility and poor use of protective equipment will make for a dangerous summer cocktail,” Oxford Economics analyst Gregory Daco wrote.
Similarly, analysts for Goldman Sachs expressed concern about the virus surging in nearly every state, Reuters reported. Consumer spending data beginning collected by Unacast and Chase also reflected a less-than-rosy picture. Although consumer spending seemed destined to return to 2019 levels, by June 20 it had receded once more as it became clear the virus continues to loom.
Is Another Stimulus Coming?
Trump’s economic advisors, Treasury Secretary Steve Mnuchin and Director of the US National Economic Council Larry Kudlow, were on-hand for the presser over the healthy June jobs report.
“I think, as you know, people thought we would have 30 million people unemployed. Fortunately, we never got to that,” Mnuchin said.
Mnuchin admitted that the jobs data isn’t enough for the administration and that “our work is not done.” To that end, he referenced CARES 4 legislation, another stimulus bill the administration is focusing on in July. However, the secretary said it would be more focused toward businesses, leaving the possibility of a second stimulus check up in the air. Mnuchin only said the White House is “going to serious consider” the idea.
The economic situation is not improving in every aspect, though. Minority unemployment continues to remain higher, The New York Times reported.
“We already knew that there were structural inequities,” said Mary C. Daly, president of the Federal Reserve Bank of San Francisco.“Covid-19 made them much, much worse — it put a spotlight on them, but it also exacerbated them.”
Expanded unemployment benefits are also scheduled to end this month, meaning many Americans will receive $600 less per week, CNN reported. The lack of income and rise in cases could prevent unemployed workers from returning to work, a scenario that could have ripple effects across the economy.
Leave a Comment