Published July 5, 2020 6:00 pm EST
by Richard Cason, Editor of NewsMovesMarketsForex
     Instagram @newsmovesmarketsforex   Twitter @newsmmforex   FaceBook @NmmForex  

 

 United States Non-farm payrolls surge by 4.8 million jobs for the month of June 2020. The Unemployment rate contracts to  11.3 percent, the U.S. Bureau of Labor and Statistics reported on Thursday.  This would be the second consecutive month the rate of unemployment has decrease incrementally month over month.

Coronavirus (COVID-19) Effect on the U.S. Economy

The  COVID-19 story continues to evolve as the resurgence of contagion rates spike in most major metropolitan areas across the U.S.  The primary States that are reporting these spikes are Florida, California, Arizona, and Texas.

The principle reason for this spikes in people contracting the virus may be from not completely adhering to the basic instructions administered by National Institute of Allergy and Infections Diseases; advising that people exercise proper social distancing, the wearing of masks in public places, and proper hand washing.

The rate of jobs recover in

As America slowly begin’s to get back to work fighting against the heavy blistering waves of  the  (COVID-19) Pandemic. It may be to early to tell: however, it seems to be a slight bit of optimism in the atmosphere as May’s employment numbers may be an indication that the government stimulus injection could be taking a positive effect on the U.S. economy.

The economic disparity picture for Black unemployment continues to rise as it relates to other worker groups category of the report.  May unemployment numbers for African American’s rose by .1% from April’s 16.6 rate to May’s 16.7 percent results.   The virus of racism an the (COVID-19) Pandemic continues to produce the socio-economic barrier’s of inequalities for African American’s  throughout the U.S. economic spectrum.

According to the Economic Policy Institute. “As of 2015, relative to the average hourly wages of white men with the same education, experience, metro status, and region of residence, black men make 22.0 percent less, and black women make 34.2 percent less. Black women earn 11.7 percent less than their white female counterparts.”
 
Let’s fast forward to 2020, the Black American experience has not witness any relieve from the  socio-economic inequalities of the past.
 
In fact (COVID-19) has disproportionately compounded the situation to catastrophic levels.  “Blacks are dying 3 times the rate of Whites from (COVID-19)”,  reports nonpartisan organization,  APM Research Lab.  This is a startling revelation which clearly depicts an eye opening snap shot of how Black America has unequivocally been impacted by the global Pandemic.
 
Lastly, Blacks are 60% less likely to have health insurance.  This situation further exacerbates the socio-economic disparities of the African American experience, whereby, perpetuating the root cause of disparities amid the Black community.
 

The unemployment rate decrease in May 2020 to 13.7 percent due to concentrated effort to contain the virus.  The U.S. Labor markets experienced a  sharp job insurgence in the leisure and hospitality, construction, education, and health services sectors according to the U.S. Bureau of Labor and Statistics. Approximately 1.9 million american workers file for jobless claims over the last week.  This has been a significant drop in fresh new claims compared to March and April 2020 jobless data.

Marc Chandler, Bannockburn Global Forex, Managing Partner and Chief Market Strategist  Fresh Take on May’s 2020 NFP report

Marc Chandler is a renown leading political economist and a foreign exchange market analyst, writer, speaker, and professor. also frequent guest on CNBC, Bloomberg Television, and FOX Business offers his exclusive perspective  and insights for News Moves Markets Forex May’s JOB’s Non Farm Payroll Report:

 NEWSMOVESMARKETSFOREX.

Marc, so what is your perspective for May’s non-farm payroll 2.5 million job increase?

MC,

“I think due to the virus, there have been permanent and temporary lay-offs.  Economist and policy makers don’t really know how much of each.  As the economies began opening, some temp layoffs were called back.  Looking at the manufacturing jobs and workweek, it appears that those employees that did return worked a shorter week.

 NEWSMOVESMARKETSFOREX.  Marc, what do you think could be the reason why there was a slight improvement in the decrease in  May 2020 unemployment rate?

MC,

 ‘The unemployment rate is a function of a different survey.  One of households.  Here there appears to be a classification error on how people absent from work should be counted.  In addition, the size of the workforce has shrunk during the pandemic so the denominator for the unemployment rate fell, which impact the final calculation. I think the survey data pointed to some slowing of contraction and Canada jobs out at the same time also showed unexpected improvement which I thought give the US report broad confirmation.”
 
NEWSMOVESMARKETSFOREX,
 
Thanks Marc for your spot on analysis, keen insights and perspective concerning the current U.S. Employment and NFP outlook situation.  Please be sure to follow Mr. Chandler on his daily blog, Marc to Market, www.martomarket.com  Breaking down and Making sense of the Global Capital .  Also, Mr. Chandler has published two outstanding book’s that are a must read: (1).Making Sense of the Dollar  -Exposing Dangerous Myths about Trade and Foreign Exchange    (2).  Political Economy of Tomorrow –shows that the most significant problems of the economic system arise not from capitalism’s weaknesses, but its strengths.

 

May 2020 Jobs report

According to the U.S. BLS the uptick in various sectors throughout the Labor markets are reflected in May’s, employment data: leisure and hospitality rose by 1.2 million, 75.million in April and 743,000 in March 2020. Construction employment also rose by 464,000 in May, Manufacturing employment increased by 225,000, Financial services increased by 33,000 jobs over the May, Wholesale trade employment was also up by 21,000 jobs.
 
  Many U.S. Economist where broadsided by the positive Jobs market data.  Most experts predicted that the economy would decline by a massive -8 million jobs for the month of May 2020.  The vast majority of this economic sentiment lean on (COVID-19)  impact, as well as the slowing of the overall  economic outlook within the U.S. Labor Markets
The change in March’s 2020 NFP release employment revised down from 492,000 from -881,00 to -1.4 million. See the full story of previous April 2020 NFP numbers;  Non-Farm Payrolls decend by 20.5M jobs, Unemployment rises to 14.7  percent April 2020.

U.S. Non Farm Payrolls Jobs Report (MAY 2020)
Time EventActualForecastPrevious
Friday, ,JUNE 5, 2020
08:30 USANonfarm Payrolls (MAY)2,509K-8,000K-20,687K
08:30 USAUnemployment Rate (MAY)13.3%19.7%14.7%
08:30 USA Private Nonfarm Payrolls (MAY)-3,094K-7,500K19,724K
08:30 USAParticipation Rate (MAY)60.8% 60.2%
High Volatility Expected

Unemployment rate and ADP National Employment Report

  • The unemployment rate moved lower  1.4 percent to 13.3% for  month of April 2020, while the private nonfarm payrolls average hourly earning decreased by $0.29 to $29.75, following a  gain of $1.35 in April.  
  •  Bureau of Labor Statistics reports that employment rose in various sectors of May Professional and business services rose by 127,000 jobs in May to buildings and dwellings (+68,000) and temporary help services (+39,000).
  • Air transportation lost 50,000 jobs over the month, following a lost of 79,000 jobs in April.
  • ADP National employment report: Non-farm Private sector  employment decreased  -2,760,000 Jobs for the month of  May 2020
  • Small Business  -435,000 National franchise  decreased -254,100 Jobs
  • Goods producing Sector down 91,000  and Service providing Sector decreased by 344,000 jobs.   

  • It is important to note that Non-farm Payrolls measures the change in the number of people employed during the previous month, excluding the farming industry.  Job creation is the foremost indicator of consumer spending, which accounts for the majority of economic activity.
  • Revisions:   With these revisions, employment gain in   January and February combined were 57,000 less than previously reported.  After revisions, job gains have averaged 245K  per January and February.

 Reference:   U.S. Bureau of Labor and Statistics. (2020). Employment Situation Summary Retrieved                     from   https://www.bls.gov/news.release/empsit.nr0. Economic Policy Institute. (2016).  Black-White wage expanding with rising wage inequalities, Introduction and key findings Retrieved from https://www.epi.org/publication/black-white-wage-gaps-expand-with-rising-wage-inequality/ Chandler, M. (2020, June 6), Interview with Marc Chandler  Fresh Take on May’s 2020 NFP’s Report (interview by Richard F. Cason, Founder & Editor for NewsMovesMarketsForex).