Hi everyone! This is Dr. Nitin Chhoda and welcome to this important episode of
Ignition Time. Some initial numbers for jobs in the month of June have come in.
Now keep in mind this is not from the Labor Department yet because they are
yet to release their numbers but this is from well-known private payroll
processor ADP. According to ADP, US businesses hired 2.4 million workers in
June and this was a lower than expected result and it shows it's going to take
quite a while for the labor market recovery to happen. The number of jobs
that were lost in March, April and May have still not been offset, it's going to
take a while to get them to be offset. Now keep in mind that for the month of
May ADP had to make a significant revision to their numbers. They had
originally projected 2.8 million jobs lost in the month of May but as it
turned out in the month of May there were 3.1 million jobs gained.
So essentially ADP got it wrong in the month of May because what happened in
the month of May was a surprise to everyone but as far as June is concerned
ADP has done their analysis and they expect 2.4 million jobs to be gained. Now
there are some encouraging signs hiring in June was actually led by small
businesses which took the hardest hit during this pandemic. Like I mentioned in
previous videos hospitality, entertainment, travel and hotels they
took the brunt of this pandemic and most of them were shut down nationwide. So
those actually starting to recover which is an encouraging sign. So according to
ADP small businesses added almost a million jobs to be exact 937,000
jobs as they continue to reopen thanks to the benefits of the Paycheck
Protection Program that encouraged them financially to bring workers back on
their payroll. According to the vice president of the ADP Research Institute
small business hiring picked up in the month of June and they are seeing a
significant rebound in industries that experienced the greatest job losses. This
is encouraging although just to be clear we have a long way to go. About 70% of
the jobs that were added in the month of June were added in the leisure and the
hospitality the trade and construction industries which is an excellent thing.
So in terms of sectors service companies accounted for 1.9 million of the jobs
that were added in the month of June. So this represents a situation where
millions of jobs are starting to come back even as we see hundreds of
thousands of individuals getting permanently laid
off and getting furloughed. So this is a situation where we have the good
happening with the bad simultaneously. Now according to a median estimate of
economists that were surveyed by Bloomberg they predict that the Labor
Department's employment survey which is still scheduled to come out on Thursday
at 8:30 a.m. East Coast time. It's expected to show that a record 3.1
million jobs were added in June as the unemployment rate fell from 13.3% to
12.2%. Now keep in mind that a significant portion of the June job
gains from the ADP private payroll report and from the Labor Department
report that's projected to come out at 8:30 a.m. East Coast time on Thursday is
expected to be in the industries that were hit hardest by the shutdowns like I
mention earlier including restaurants, bars, stores and to a lesser extent
hotels. Now Travel is still significantly impacted a lot of people aren't flying I
did talk about the five economic indicators that chart the recovery of
our economy and you can check out another video but Travel specifically
people flying that's taken a big hit. I myself I'm definitely not going to be
flying in the foreseeable future and finally the June job report numbers
are not going to take into consideration the surge of cases in the south and in
the West in states like Texas Arizona Florida because 17 states have paused or
reversed the reopening because of what's going on with the pandemic so
essentially all of those numbers will be reflected in July's job report also the
jobless claims data individuals who are jobless and applying for unemployment
claims is also expected to keep up although the rate at which it's creeping
up is expected to slow down which economists find encouraging so basically
a claims total of 1.3 million jobless claims which is expected we don't have
the exact numbers yet we'll have the exact numbers very shortly would push
the first-time claim since the crisis began in mid-march to a staggering 48
point 4 million jobless claims and that that is a big number it would also mark
the 13th straight weekly drop in initial claims since they peaked at 6.9 million
at the end of March so the declines have slowed recently with claims hovering
right around 1.5 million in the most recent three week period so what is the
bottom line all of this we are starting to get jobs
back nationally now I know things could be different and will be different in
your specific state depending on what the state governor has mandated
depending on what your employers doing depending on social distancing
guidelines but nationally we are starting to see jobs come back which is
a good thing they are not coming back as quickly as we would want at this moment
in time things are gradually starting to turn in the labor market it could take a
few more months potentially several months for the job market to recover
completely a lot of it will depend on how well the states do with combating
the surge and what happens medically from a vaccine standpoint thank you so
much for watching I appreciate you hang in there if you learn something new from
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numbers like this that affect the economy and that affect you thank you so
much I'll talk to you soon bye