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AFP
July 3, 2020

Trump cheers US economy after June jobs surge despite virus

Business

AFP
July 3, 2020

Washington: President Donald Trump on Thursday hailed new data showing huge jobs gains in June, but continued to downplay surging COVID-19 cases that could reverse the tentative recovery.

Employers brought 4.8 million people back to work last month, two million in the hard-hit leisure and hospitality sector, the Labor Department reported, which dropped the jobless rate by two points to 11.1 percent.

The new data together with the 2.7 million jobs won back in May means the economy has regained 7.5 million of the more than 22 million jobs lost since mid-March amid the coronavirus pandemic as businesses were closed nationwide to prevent the spread of infections.

Speaking to reporters at the White House, Trump, who needs a strong economy to help his re-election bid in November, went through the report line-by-line, saying some of the job gains were records -- without mentioning the massive losses suffered since March due to the pandemic.

"Today´s announcement proves that our economy is roaring back," Trump said.

"The crisis is being handled," he continued. "This not just luck, what is happening. This is a lot of talent."

He also cheered the soaring US stock market, but left without taking questions from reporters on the surge in cases of coronavirus, or the scandal over reports that US intelligence believed a Russian unit paid bounties for Taliban-linked militants to kill US troops.

The welcome news on jobs adds to positive signs in other reports showing the world´s largest economy is on the mend backed by massive government support for workers and businesses, which also helped firms rehire some employees.

But as the United States faces the world´s worst coronavirus outbreak with more than 127,000 deaths and a record 50,000 new cases a day, economists fear a renewed malaise as local authorities roll back efforts to return to pre-pandemic normal and businesses are forced to shut down again.

The employment creation in June was far higher than economists were expecting, and showed the rapid pace of gains as people who were laid off returned to their jobs.

Leisure and hospitality added 2.1 million positions and retail grew by 740,000 jobs, while manufacturing and construction also rehired in large numbers.

But a separate Labor Department report showed job losses continued, as 1.43 million people filed initial claims for unemployment benefits last week, only slightly less than the prior week.

Layoffs have averaged 1.5 million a week over the past four weeks, according to the weekly claims data.

"The claims numbers cannot be an afterthought. They indicate the extent to which companies and governments continue to shed workers," economist Joel Naroff said in an analysis Wednesday.

"We need to get those number down dramatically as it is clear the reopening is not going as planned."

The monthly employment report focuses on the week containing the 12th of the month, which was before the recent spike in cases. And the good numbers come with caveats.

The number of businesses and households used in the two-part survey remains lower than in pre-pandemic months, the Labor Department said.

The unemployment rate also continues to underestimate the real level of joblessness, which which would have been above 12 percent if some workers had not been improperly classified.

Gregory Daco of Oxford economics called the report "a great summer cocktail."

"However, one should sip this cocktail prudently to avoid a bad hangover. Beneath the appealing look, the labor market is still facing a net loss of 14.7 million jobs from the global coronavirus recession," he said.

And he noted that the labor market "is still bleeding jobs."

Treasury Secretary Steven Mnuchin acknowledged the continued challenges.

"I´m concerned until we get everybody back to work," he said.

He added that "there is no question" that government aid efforts are effective, and repeated that he hoped to have a new aid package approved by the end of July.

The $2.2 trillion CARES Act approved in late March included funding that helped employers to rehire workers, and Mnuchin said he favors extending that to help "business that are particularly hard hit."