The US jobs report was good as it was always going to be, via Calculated Risk:
The headline monthly jobs number was well above expectations and the previous two months were revised up 90,000 combined. The headline unemployment rate decreased to 11.1% .
Last month I noted that the “reopenings” would be a June story, and that is what this report suggests. In addition, companies using PPP had to rehire employees to convert the loans to a grants. Unfortunately, the surge in virus infections and related closures, will probably negatively impact the July report. In addition, we will probably start to see more PPP related layoffs.
As a reminder, the course of the economy will be determined by the course of the pandemic.
The question has always been how far and fast does the recovery get? The leading indicators already suggest that the virus has stalled the bounce in July for jobs:
For demand:
For the trajectory of recovery:
In short, what comes next is the flattening swoosh recovery not the “v-shape” and a stall well below previous levels of output with huge implications for earnings.
Though when stocks and the Australian dollar will recognise that is another question.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
Earnings don’t need to return to previous levels if multiple expansion has occurred…which it has. Stocks can go a lot higher on anaemic earnings growth in the new normal.
bcnichMEMBER
yes they can…..but they aren’t
No new normal
Don’t be fooled……..
It’s smoke and mirrors.
It’s time ???? When????….like DLS says above.
And the time is NEAR !
bcnichMEMBER
wow look at that chart % job loss since WW2
Woohaaa, I didn’t think that bad
we are back at 10% from 15%
just looks like a bear market rally to go to 20% unemployment.
I’d guess over the next 12 months, unemployment in US will get worse from here not better……
Popcod
Looking at the unemployment chart I find it ‘interesting’ that the 3 most recent previous downturns were the longest. Has something structurally changed? Will employment recovery this time follow recent history? The pandemic is going to drive technological innovation, as they always do. Will this be a net positive or net negative for employment in developed economies? Time will tell.
bcnichMEMBER
It’s a structural adjustment where 20% will be the minimum – maybe up to 50% this time or even higher.
This pandemic has hit at a time when there is a major shift to the internet
Look at AMAZON share price nearly $3,000
Employment is really based on this global leveraged debt ponzi bubble and it’s going to burst and never come back….
SoCalSurfCreeperMEMBER
Calculated Risk is a brilliant blogger. He was my main source of info during the US mortgage bubble starting in about 2005 and right through the subsequent implosion in 2008 and beyond. There was a banking insider that went by the name of Tanta and she provided incredibly valuable insider analysis of the shenanigans. She died of cancer part way through. Very sad.
Beyond that, I just had a great road trip from SD to stay with friends in Palm Springs and on into the Arizona Covid hot zone. Scored a room at the south rim of the Grand Canyon at the historic El Tovar. Those rooms normally sell out a year in advance so they are a hassle to get. Great upside to this Covid mess. Hiked down into the canyon, and the trails weren’t busy. Drove home stopping in Prescott AZ for a night and went out eating and drinking. We don’t have any Covid symptoms…. so far!
FUDINTHENUDMEMBER
So turns out the US has been learning their numberwang techniques from the Chinese. Those labor figures are surely complete bullshido
Earnings don’t need to return to previous levels if multiple expansion has occurred…which it has. Stocks can go a lot higher on anaemic earnings growth in the new normal.
yes they can…..but they aren’t
No new normal
Don’t be fooled……..
It’s smoke and mirrors.
It’s time ???? When????….like DLS says above.
And the time is NEAR !
wow look at that chart % job loss since WW2
Woohaaa, I didn’t think that bad
we are back at 10% from 15%
just looks like a bear market rally to go to 20% unemployment.
I’d guess over the next 12 months, unemployment in US will get worse from here not better……
Looking at the unemployment chart I find it ‘interesting’ that the 3 most recent previous downturns were the longest. Has something structurally changed? Will employment recovery this time follow recent history? The pandemic is going to drive technological innovation, as they always do. Will this be a net positive or net negative for employment in developed economies? Time will tell.
It’s a structural adjustment where 20% will be the minimum – maybe up to 50% this time or even higher.
This pandemic has hit at a time when there is a major shift to the internet
Look at AMAZON share price nearly $3,000
Employment is really based on this global leveraged debt ponzi bubble and it’s going to burst and never come back….
Calculated Risk is a brilliant blogger. He was my main source of info during the US mortgage bubble starting in about 2005 and right through the subsequent implosion in 2008 and beyond. There was a banking insider that went by the name of Tanta and she provided incredibly valuable insider analysis of the shenanigans. She died of cancer part way through. Very sad.
Beyond that, I just had a great road trip from SD to stay with friends in Palm Springs and on into the Arizona Covid hot zone. Scored a room at the south rim of the Grand Canyon at the historic El Tovar. Those rooms normally sell out a year in advance so they are a hassle to get. Great upside to this Covid mess. Hiked down into the canyon, and the trails weren’t busy. Drove home stopping in Prescott AZ for a night and went out eating and drinking. We don’t have any Covid symptoms…. so far!
So turns out the US has been learning their numberwang techniques from the Chinese. Those labor figures are surely complete bullshido