CIBC Research discusses its reaction to today's US jobs report for the month of June.
"Non-farm payrolls posted an impressive 4.8 million advance in June, which was more than 1.5 million above the consensus forecast albeit broadly in line with our expectation. With the job increases tilted once again towards lower-paying sectors that were hit worse by the job losses of April, average hourly earnings "fell" 1.2% on the month. A gain in employment of similar magnitude in the household survey meant that the unemployment rate fell to 11.1% (from 13.3 vs a consensus of 12.5%) despite a larger-than-expected rise in participation," CIBC notes.
"However, even with the gain in June, payrolls have only recouped about a third of the jobs lost over March and April. And given that Covid-19 cases have been rising again in some parts of the country, resulting in the delaying/reversal of reopening plans, even the partial rebound in jobs during May and June could be viewed as too much, too soon, relative to the virus spread. Some of the high frequency employment and mobility data that have been the best guides to non-farm payrolls in recent months had already started to show a flattening out of the previous improving trend during the second half of June (after the payroll survey period ended). Moreover, today's claims figures were a little disappointing, with both initial and continuing claims showing very little change versus the prior week. While we currently still expect a positive print for July's payroll figures, it will be much smaller in size," CIBC adds.