rtmark
LearnBonds.com

Does 4.8m new US jobs in June mean a V-shaped recovery?

Mohit Oberoi
Author: Mohit Oberoi

Last Updated: July 3, 2020

The Bureau of Labor Statistics released the June nonfarm payroll data on Thursday which showed 4.8 million Americans found jobs last month, dividing opinion among economists about how strong the US recovery will be.

The figures beat analysts’ estimates of 2.9 million jobs, and eased the unemployment rate down to 11.1% in June. It had spiked to 14.7% in April and in May Goldman Sachs predicted that the US unemployment rate would peak at 25%. In May, the economy added 2.5 million jobs. However, in March and April more than 22 million jobs were lost as employers cut payrolls during the height of the coronavirus shutdown.

“The market is pricing in more of a V-shape recovery. It’s certainly pricing in a V-shape recovery in terms of earnings, said Kate Moore, head of thematic strategy for BlackRock’s Global Allocation investment team. “The consensus is at about $163 [for S&P 500 earnings] for 2021, and we’re trading at 19 times that at current levels. So I think what the analyst and investment community need right now is confirmation from companies as they report second-quarter earnings, which are going to be abysmal, confirmation that they’ve modified their business models and they are thinking about an existing Covid, not a post-Covid, world.”

Nada Eissa, former deputy assistant secretary of the Treasury for economic policy had a word of caution. She said: “I don’t think the numbers are meaningless, but I do think that we’re not thinking about the fact that we have this resurgence in the virus, and the resurgence has two elements. One is the unforced errors by officials who basically opened without following the guidelines and have had now to pull back.”

Eissa added: “But we’ve also seen a resurgence in places that did do the hard things so restaurants were set to open for diners in New York City. That’s now on hold. And so I think that, looking forward, I don’t know that we’re going to be able to see the same types of job growth or continued job growth. I think it’s going to be very jagged.”

David Rosenberg, founder of Rosenberg Research said the US jobs market still has a lot of ground to recover.

Rosenberg said: “It’s still not clear to me as though today’s job number in and of itself gives you a V-shaped recovery …. But we have to keep in mind the deep hole we’re coming out of. I mean, there’s no question that the jobs are coming back more quickly than anybody would have anticipated, including me just a few months ago.

He added: “But we have to also recognize the fact that the economy was reopening ahead of schedule, so it would make sense that we start seeing some job creation coming back. But the hole is still so big in the context of losing 22 million jobs in two months so far. With all the reopenings that have happened and all the stimulus that’s taken place, we’ve recouped a grand total of one third of that.”

If you’re interested in raising finance to see you through this tough period, see our list of some of the loan providers. There is also a list of loan providers for people with bad credit.

Trusted & Regulated Stock & CFD Brokers

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission

Rating

64 traders signed up today

Visit Now

75% of investors lose money when trading CFDs.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

What we like

  • Sign up today and get $5 free
  • Fractals Available
  • Paypal Available

Min Deposit

$0

Charge per Trade

$1 to $9 PCM

Rating

Visit Now

Investing in financial markets carries risk, you have the potential to lose your total investment.

Available Assets

  • Total Number of Shares999
  • US Stocks
  • German Stocks
  • UK Stocks
  • European Stocks
  • EFTs
  • IPOs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 $1 - $9 per month
  • NASDAQ $1 - $9 per month
  • DAX $1 - $9 per month
  • Facebook $1 - $9 per month
  • Alphabet $1 - $9 per month
  • Telsa $1 - $9 per month
  • Apple $1 - $9 per month
  • Microsoft $1 - $9 per month

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Mohit Oberoi

Mohit Oberoi is a freelance finance writer based in India. he has completed his MBA with finance as majors and also holds a CFA charter. He has over 13 years of experience in financial markets. He has been writing extensively on global markets for the last six years and has written over 6,500 articles. He mainly covers metals, electric vehicles, asset managers, and other macroeconomic news. He also loves writing on personal finance and topics related to valuation.