Today, July 2, the US Bureau of Labor Statistics' job report showed the economy added 4.8 million jobs in June. Experts thought it would be around 3 million. Last month, the report also surprised experts with an impressive 2.5 million jobs. On both occasions, Trump wasted no time holding a press conference and praising himself. The economy was roaring back. And it must roar back because he has nothing else going for him but the economy, which crashed in February and, over two months, lost 20 million jobs.
The markets transformed the good news from the Bureau of Labor Statistics into modest gains. But, as always, the markets are dreaming. Today's report is already dated. It only covers the first two weeks of June. This is around the time COVID-19 cases were rebounding after remaining mostly flat in May. Yesterday, the US recorded 50,000 cases, a figure that easily raced past the peak of the first surge, 43,000, on March 6. The director of the National Institute of Allergy and Infectious Diseases, Anthony Fauci, recently warned that the US could see 100,000 cases a day in the near future, if tougher anti-market and anti-election-winning measures are not imposed soon.
All of this means the economy is going to grind to a halt again. Already Arizona has closed business, as well as Texas. Florida, however, has decided to play with fire and keep things open. This will only delay its economic recovery and kill lots of people. Ron DeSantis, the governor of the Sunshine State, is fighting a losing battle.
My point: The stock markets are still in June, when new cases hovered between 14,000 cases and 24,000. We do not live in that economy anymore. We live in the one that tanked the economy in March.
There is more bad economic news.
The surprisingly high job numbers in May and June owe a lot to the semi-generous unemployment benefits that came with the Coronavirus Aid, Relief, and Economic Security Act. It was passed four months ago. It ends at the end of July. And, at this point, the GOP is not interested in extending them.
NBC News reported on July 1:
Senate Majority Leader Mitch McConnell, R-Ky., said Tuesday that the unemployment benefit passed in the CARES Act in March won't be in the next phase of coronavirus relief, which he said he expects to pass by the end of July. He argued that it has encouraged many Americans to remain jobless.If McConnell succeeds, the plug will be pulled and the job market will crash like never before.
Also, the job report is one thing, and the weekly report on unemployment insurance is another. Both reports came out today. The story the latter tells is not the same as the former's.
The Department of Labor also reported Thursday that 1.4 million workers — more than expected — filed for first-time unemployment benefits last week. While the claims data is collected weekly, the survey for the jobs report wraps around the middle of each month.Unemployment claims for the previous week were 1.4 million. What can we expect next week? You only need to read this headline