The surprising May jobs report on Friday showed the U.S. economy added 2.5 million jobs last month, with the unemployment rate declining to 13.3% from 14.7%.
Economists polled by MarketWatch had expected a loss of 7.25 million jobs and an unemployment rate of 19.0%
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Below are some initial reactions from analysts and economists, as U.S. stocks SPX, +2.77% DJIA, +3.41% trade sharply higher following the data.
Many things are taking place:
Sweden: Will COVID-19 Economics be Different?
A street in Stockholm, Sweden. Restaurants remained open in Sweden subject to some restrictions (photo: Peter Johansson/Avalon.red/Newscom)
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In this article written for IMF Country Focus, the IMF's Sweden team* explains that the merits of Sweden’s strategy to contain COVID-19—which is based more on recommendations and social responsibility than legal obligations—are increasingly attracting attention, both from a health and an economic perspective.
Derby's Take: Oxford Economics Tallies Impact of Fed's Pandemic Support - WSJ
Federal Reserve officials have framed their unprecedented actions during the coronavirus pandemic as an effort to help bridge the economy to the other side, but at least one research firm sees some stimulative power in what the central bank has done.
Patents, economics, and pandemics | Science
↵ * Employee and shareholder of Sanofi (active in COVID-19 R&D). The views expressed here reflect my personal opinion and are independent of policies/positions of this organization.
↵ † Board member and shareholder of Danaher and shareholder of Sanofi (both involved in COVID-19 R&D).
In case you are keeping track:
Coronavirus: Jim O'Neill says V-shaped recovery is perfectly possible
Chatham House Chair Jim O'Neill has argued a so-called "V-shaped" economic recovery is "perfectly possible," saying early indicators make it "pretty clear" that many economies are in a comfortably better position than some had feared.
His comments come as global stocks continue to rally, despite the coronavirus pandemic and corresponding confinement measures leading to an unprecedented economic shock.
It seems to suggest investors are tentatively pricing in an economic recovery, with many countries taking steps to gradually ease some lockdown restrictions.
Counting the cost - America's public-pension funding crisis worsens | Finance & economics |
S HARE PRICES may have rallied from the depths they plumbed when the coronavirus pandemic was spreading rapidly around the world. But the S & P 500, America's main stockmarket index, is still below its level at the start of the year. That is bad news for pension funds, which rely on their investments to pay out benefits to retired people.
Unless markets recover fully, the Centre for Retirement Research ( CRR ) in Boston estimates, the average funding ratio of American state and local-government pension plans for the fiscal year ending in June 2020 will be 69.5%. That is the lowest level this century. Back in 2000 the average plan was fully funded.
Free exchange - Japan probes the limits of economic policy | Finance & economics | The
Japan's experience of covid-19 has been remarkably mild. Despite its older population, a rash of cases early in the epidemic and a reluctance to impose strict lockdowns, its recorded infection rate is among the lowest in the rich world: just 134 per million, less even than in widely touted success stories like South Korea and New Zealand. It began its battle against the economic effects of the pandemic from an especially weak position, though.
More remarkable, though, has been the extent of fiscal support. In April Mr Abe's government unveiled spending and guarantees worth ¥117trn, or roughly 20% of GDP , one of the most extreme responses to the pandemic. Perhaps feeling the pressure from a public that has become increasingly frustrated with the government's handling of the crisis, Mr Abe announced another package in late May, which is roughly the same size as the first.
Tomorrow's problem - Don't worry about inflation—yet | Leaders | The Economist
It is only natural for money-creation on this scale to spark fears about inflation, which is the consequence of too much money chasing too few goods and services. All the more so because the pandemic has constrained production, at least temporarily, by forcing factories and shops to close and limiting global trade.
It is not. Several reasons suggest the hawks will probably be proved wrong again. Even accounting for the fall in oil prices, inflation is sharply lower in most places because households are slashing their consumption and saving more (see article ). Some of that is by necessity—it is hard to spend when shops are shut. But even as economies reopen, spending is likely to remain tepid, not least because unemployment is soaring.
Happening on Twitter
Economists' expectations: 7.25 million jobs lost and an unemployment rate of 19.0% Reality: 2.5 million jobs added… https://t.co/kub5zvEFTd MarketWatch (from New York, NY) Fri Jun 05 14:23:05 +0000 2020
One economist on the surprising revelation that 2.5 million jobs were added in May and unemployment declined: "WTF… https://t.co/m1EiXSGEC0 MarketWatch (from New York, NY) Fri Jun 05 14:01:47 +0000 2020
'The biggest payroll surprise in history' — economists react to May jobs report https://t.co/VNMiWjwRPG MarketWatch (from New York, NY) Fri Jun 05 13:45:56 +0000 2020
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