Optimism as U.S Unemployment figures exceed forecasts, undercut by Covid-19 outbreak
6th July
Samuel Soo
The U.S. non-farm payroll data released on Thursday exceeded most forecasts, with employment rising by 4.8 million in June and unemployment falling to 11.1%, from 13.3% in May. This is following a gain of 2.699 million non-farm payrolls in May. The highest gains were in the leisure and hospitality sector, reflecting restrictions being loosened in June.
Key arguments against a bullish dollar include Covid-19 hotspots in major states including Arizona, California, Florida and Texas, which have already shut down bars that had only just re-opened. The NFP is still down 14.7 million jobs since February. For the 14th week in a row, over 1 million people filed for first-time unemployment benefits, signalling a steady flow of growing unemployment.
While the unemployment gains may be a positive sign for the U.S., there are still several obstacles that prevent a swift economic recovery.