Us labor market recovers despite continuing corona trap

Us labor market recovers despite continuing corona trap

Nearly five million americans got back to work in june, but new doom looms as corona pandemic worsens in southern part of country.

Statistics from the world’s roughest economy could hardly have been more contradictory on thursday: the unemployment rate fell more sharply than expected from 13.3 percent in may to 11.1 percent in june, while coronavirus pandemic figures set new negative records. U.S. Authorities reported wednesday 50.000 new infections – more than ever before. And an improvement in the situation did not seem to be in sight in the short term.

There is an explanation for the contradiction between labor market data and infections: the unemployment rate for june was based on data that only reflected the situation up to the middle of the month. Possible effects of the recent dramatic worsening of the pandemic were therefore not yet reflected in the figures. "We expect the recovery from now on to be much bumpier with much slower gains in new jobs," said therefore analyst michael pearce of the consultancy capital economics.

In the particularly affected states in the south of the country, such as florida, texas, arizona and california, relaxations of the corona requirements have recently been reversed or postponed again. Bars, fitness centers and cinemas had to close again in some cases. Companies like apple also closed their stores again in many places. Mcdonald’s postponed plans to further open its 14 or so stores, according to media reports.000 fast food restaurants in the USA.

A sign of the continuing difficulties was also the new applications for unemployment benefits. In a separate announcement on thursday, it said that in the week ending 27. June, about 1.4 million people applied for assistance for the first time, about the same as the previous week. That still left about 20 million people receiving regular unemployment benefits. "Our work is not done," treasury secretary steven mnuchin said in the weben house: "our work is not done until every single american who lost their job because of covid has a job again."The stimulus package of nearly three billion dollars had helped stabilize the economy and the job market, he said.

Nonfarm payrolls rose by 4.8 million in june – nearly half of those new jobs were in the hospitality industry, according to the government. Analysts had expected a slightly smaller drop in unemployment. In april, the unemployment rate was still 14.7 percent.

U.S. President donald trump said at the white house that the rapid improvement in the labor market had "exceeded all expectations". The economy is recovering "faster and better" from the corona crisis than expected, he said. Trump predicted third quarter growth would be "fantastic". He added, visibly pleased, that these figures were announced just before the presidential election in november. Trump is running for a second term – so signs of economic recovery came in handy for him.

Trump downplayed the significance of the worsening coronavirus pandemic. There were isolated flashpoints, but they were quickly fought, trump said. "We extinguish the fires," he said. Democrats accuse the republican of having given up the fight against the virus because of his restraint in the corona crisis. The u.S. Had never come close to controlling the pandemic: the number of new daily infections never really fell below 20.000.

Democratic presidential nominee joe biden blamed trump’s failed corona policies for continued high unemployment. "Millions of americans still had their jobs when donald trump did his job," said biden. Meanwhile, trump has apparently "completely given up," he criticized.

The measures to contain the coronavirus pandemic, which at times led to closures of businesses, restaurants and companies across the country, have hit the US economy hard. More than 45 million people have lost their jobs at least temporarily since mid-march – more than ever before in such a short period of time. Many analysts expect the unemployment rate to remain close to ten percent at the end of 2020. It had been at 3.5 percent in february, the lowest level in decades.

The u.S. Federal reserve (fed) recently described the outlook for further economic development as very uncertain. "The way forward is unusually uncertain and will depend in large part on our success in containing the virus," central bank chief jerome powell told congress tuesday. "A complete recovery is unlikely until people have the confidence to resume a broad range of activities," powell said.

Since the pandemic began, about 2.7 million confirmed infections have been reported in the u.S., according to johns hopkins university data. Around 128.000 people died after contracting the sars-cov-2 pathogen, which can trigger the lung disease covid-19.