July 2, 2020
Good Thursday morning,
The U.S. equity markets were mixed yesterday with the Dow Jones Industrial Average dropping 77.91 points, or -0.3%. The S&P 500 and NASDAQ posted gains for the day of 15.57 and 95.86 point, or 0.5% and 0.95%, respectively.
The Labor Department released a much-anticipated jobs report for June this morning and welcomed news it was. While economists who were surveyed expected the economy to add 3.1 million jobs in June, today’s report showed that employers added 4.8 million jobs – the biggest single month jobs increase on record. What is more, while these same economists expected the unemployment rate to drop to 12.5%, the U.S. unemployment rate dropped to 11.1% from 13.3% last month.
Accentuating today’s report was that May’s employment report was recently revised upward by 130,000 jobs for a total addition of 2.7 million new jobs for the month.
Average hourly wages, another important indicator of economic growth, was reported to be 5% on a year-over-year basis as of June. Adjusted for inflation (which has been persistently low in recent years), the “real” average hourly wages show the American worker to have greater purchasing power in this period of economic recovery.
In the few moments before the start of the trading day today, Dow futures are up more than 420 points on the better-than-expected jobs, unemployment and wages data.
Underlying this economic enthusiasm, however, is the growth/containment of the coronavirus, especially as it may be affected by a second wave of infections. Jerome Powell, Chair of the Federal Reserve, has noted that widespread reclosures may curb the rate of recovery of the economy.