U.S. Unemployment Rate Fell to 11.1% in June
The president wasted no time heading to the cameras to the record jobs gain in June. There's not been anything like this record setting shattering all expectations, our economy is roaring back. It's coming back extremely strong. These are all historic numbers. A record never had a number like that an all time high think of that that's the largest increase in the history of our country. That's a tremendous number a phenomenal number so these are numbers that are not numbers. Of, the presidents would have. This has been a tremendous success. We've done an incredible job we've done a historic thing likes of which nobody has ever seen before in my opinion. Donald? Trump got to use all the superlatives today talking about the job number, but it's important to look deeper into those numbers. CNBC points out one big contributor to the decline in the jobless rate was those returning to work from temporary layoffs? This comes as a new report from the Congressional Budget Office that says the unemployment rate is expected to stay above pre pandemic levels through. Through the end of twenty thirty worth US more, we welcome to the broadcast policeman senior economics reporter with our sister network CNBC. In an old friend of Mine Steve. Great to see you. Thank you for being with us. I mean it kind of was humor listening to the president as I said us all the superlatives, because there's a big piece of context here these are. These are jobs in many cases that people were not working at. As opposed to the creation of new jobs. These aren't jobs created and what the president has missing. There is the historic job losses that happened just a couple of months ago. That were multiples of the jobs that have been brought back in fact alley. I think the best way to think about this. As it was really a bittersweet number, the president was right. It was several times. It was just about double the expectation for point million. It was indeed a record, but let's just do the math. We've lost twenty two million jobs since the corona virus hit the US economy. We brought back seven. Seven and a half million, so everybody can do the math at home. That's fourteen and a half. Million jobs still not return. We brought back about a third. It's a bit quicker, but the other bittersweet part about this thing Ali is that with these renewed shutdowns? You have two things going on. You could have businesses that have shut down and won't we open now? Because of these new infections, but you have businesses that didn't even close before because those places were not affected by the virus, and those workers unfortunately could join the ranks of the unemployed. Let's talk about the more important thing that people like you. And I think about, and that is structurally what has happened to the job market? How much has been destroyed? That won't come back when we return to some version of normal the the the the congressional. Budget Office talks about not getting back to these particularly low unemployment rates that we were at before coronavirus until twenty thirty. That seems uniquely pessimistic, a lot of people talking about two to three to four years. How what does that look like long term return to normal? The best forecast I've seen have been my two or three years. I think that the CBO is extremely pessimistic. But we're looking for Ali is something that economists are now calling scarring in other words we've we had a lot of people. Go on temporarily. A lot will come back, but for some of these places the business may not be there anymore. The job may not be there anymore. On the plus side, there may be new jobs if people continue to get more stuff online rather than in retail stores, but. But some of those retail stores they may never reopened some of the restaurants. They can't survive at fifty percent capacity until we go back to one hundred percents of there's going to be scarring the economy. The extent of which I think the CBO may be too pessimistic, but the idea that we're going back to the way. It was a couple months ago. In short, order is almost certainly to optimistic. Stevens. I know it's something you think about it. Because I know you talked about it a lot of CNBC. How do you reconcile the record stock market performance? We're in very strong territory of Martian popped into earth and looked at the stock market. They'd say all our problems are over. Well it's something that you know. If I had another eyebrow I'd raise that up, but and if I could raise them higher than my forehead. I would do that, too. It's a curious thing to watch. There is an awful lot of the liquidity from the Federal Reserve. In the system. Interest rates are very low. If you're looking to have a return on your money, you can't do it in the charter market. You've gotta go into stocks I think that's one thing. I think there's a belief among some among many investors right now that the economy will return something normal in short order in a six month or one year timeframe. So I think those two things kind of combine the other thing Ali is if you look certain stocks have done very well and pushed up these indices, but some of the stocks and some of the industries that we've been talking about. Have not done well ahead of not come back, so so the market is correctly I. think discounting that and this changed economy that we're gonNA half example with the airline. Airline, so it is curious to watch this market think that things are going to get better as quickly as I think. The market's a little bit optimistic when it comes to discounting the uncertainty of this virus, and as you know Ali, the Fed has been all over this idea saying, wait a second. We don't know if this thing's GonNa come back and I think they've been proven right on that score.