The Trump economy is gaining speed again and that is good news for the president’s reelection prospects and good news for the nation.
Jobs took off upward by 4.8 million in June and the unemployment rate fell to 11.1% as the U.S. continued its reopening from the coronavirus pandemic, the Labor Department said Thursday. Economists surveyed by the Wall Street Journal/Dow Jones had been expecting a 2.9 million increase and a jobless rate of 12.4%. They were surprised again, after last month’s job rise, by the strength of the recovery.
June jobs growth marked a leap from the increase of 2.7 million in May, which was revised up by 190,000. The June total is easily the largest single-month gain in all of U.S. history, ever, bar none. Democrats will be unhappy about this good news for the country and will seek to pour cold water on the data.
“Today’s announcement proves that our economy is roaring back. It’s coming back extremely strong,” President Donald Trump said at a news conference on Thursday. He mentioned specifically the sharp drop in the unemployment for blacks, a number that fell from 16.8% to 15.4%. “These are historic numbers,” he commented.
Wall Street reacted enthusiastically to the report, with futures indicating a more than 400-point advance at the opening bell. “The 4.8 million rise in non-farm payrolls in June provides further confirmation that the initial economic rebound has been far faster than we and most others anticipated,” said Michael Pearce, senior U.S. economist at Capital Economics.
Leisure and hospitality accounted for the biggest increase, as they saw a 2.1 million gain, accounting for about 40% of the total growth. Another big factor in the decline of the jobless rate was a drop in those on temporary layoff. That total fell by 4.8 million in June to 10.6 million after a decrease of 2.7 million in May. The short-term jobless level fell by one million to 2.8 million. That information shows undeniable signs the economy is recovering from the crippling effects of the virus and subsequent policies.
The labor force participation level also saw a sharp gain, rising to 61.5%, which brings it to only 1.9 percentage points below its February historic high, a month before the virus hit the economy.
Jobs were equally balanced at 2.4 million apiece for full- and part-time workers. Retail also saw a boost, with a gain of 740,000. Education and health services rose 568,000 and manufacturing was up 356,000. “Manufacturing looks like it’s ready to take off to a level that it’s never been,” Trump said at the press conference, “A lot of that has to do with our trade policy, because we’re bringing manufacturing back to our country.”
Citigroup economists say the composition of job gains suggests that hiring will continue to be strong. “A second consecutive large upside surprise to hiring relative to consensus confirms our view that the reopening rebound would be much more robust than most expected a couple months ago,” Citi economist Andrew Hollenhorst said in a statement. “We are particularly encouraged by the composition of hiring, which shows potential for further large gains in manufacturing, construction, and healthcare jobs, which are relatively insulated from social distancing.”