Hiring rose in June as US states lifted lockdowns but a resurgence of the coronavirus could undo that. ©AFP/File Frederic J. BROWN
Washington (AFP) – US President Donald Trump hailed data released Thursday showing huge employment gains in June, but he continued to downplay surging COVID-19 cases that could reverse the tentative recovery.His cheering drew a sharp rebuke from former vice president Joe Biden, who is challenging Trump in the November election and said there is little to celebrate with the economy still in a dire state.

The quarrel came as the Labor Department reported employers brought 4.8 million people back to work last month, close to half in the hard-hit leisure and hospitality sector.

The hiring dropped the jobless rate by two points to 11.1 percent — a figure nonetheless higher than any seen in decades and well above the peak of the global financial crisis.

Speaking to reporters at the White House, Trump, who needs a strong economy to help his re-election bid, went through the report line-by-line, saying some of the job gains were records.

“Today’s announcement proves that our economy is roaring back,” Trump said.

“The crisis is being handled,” he continued. “This not just luck, what is happening. This is a lot of talent.”

He also cheered the soaring stock market, but left without taking questions from reporters on the spike in cases of coronavirus, nor the scandal over reports that US intelligence believes a Russian unit paid bounties for Taliban-linked militants to kill American troops.

In a live webcast later in the day, Biden pointed to the worsening COVID-19 situation in the United States, which has seen the world’s worst outbreak with more than 128,000 deaths and new infections now at 50,000 a day.

“There’s no victory to be celebrated when we’re still down nearly 15 million jobs and the pandemic is getting worse, not better,” Biden said.

“We are still in a deep, deep jobs hole because Donald Trump has so badly bungled the response to the coronavirus, and now has basically given up responding at all,” Biden said.

– Good news, bad news –

The welcome news on jobs is the latest indication that the world’s largest economy is on the mend, thanks to massive government support that has helped firms rehire some employees.

The new data was far better than economists expected, and together with the 2.7 million jobs won back in May means the economy has regained 7.5 million of the more than 22 million jobs lost since businesses were closed nationwide to stop the coronavirus in mid-March.

Leisure and hospitality added 2.1 million positions and retail grew by 740,000 jobs, while manufacturing and construction also rehired in large numbers.

But economists now fear a renewed malaise as local authorities start slowing down efforts to reopen businesses due to the virus’s resurgence.

And a separate Labor Department report showed job losses are continuing, as 1.43 million people filed initial claims for unemployment benefits last week, only slightly less than the prior week.

Layoffs have averaged 1.5 million per-week over the past four weeks, according to the weekly claims data.

“The claims numbers cannot be an afterthought. They indicate the extent to which companies and governments continue to shed workers,” economist Joel Naroff said in an analysis Wednesday.

The monthly employment report focuses on the week containing the 12th of the month, which was before the recent spike in cases.

And the Labor Department said the report continues to underestimate the real level of joblessness, which would have been above 12 percent if some workers had not been improperly classified.

– Stimulus coming –

Gregory Daco of Oxford economics called the report “a great summer cocktail,” but noted 14.7 million jobs still have not returned since the coronavirus arrived.

The Congressional Budget Office in its updated economic forecasts Thursday said the unemployment rate will not return to its pre-pandemic level until the end of 2024, when it will reach 5.9 percent.

CBO projects US GDP will contract nearly six percent this year, and not regain the ground lost until mid-2022.

Treasury Secretary Steven Mnuchin acknowledged the continued challenges, saying he hoped by the end of July to have a new aid package to follow the $2.2 trillion CARES Act approved in late March.

That bill included funding to help employers rehire workers, and Mnuchin said he favors extending that to help “business that are particularly hard hit.”

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.