US firms create record 4.8 million jobs in June

BBC.- The US economy created jobs at a record pace in June as firms took on more staff after the coronavirus downturn.

Payrolls surged 4.8 million, the most since the Labor Department began keeping records in 1939, helped by the reopening of factories and restaurants.

It follows May’s jobs rebound, when 2.5 million joined the labour market, and comes after consumer spending data saw a jump in activity.

But a recent spike in Covid-19 cases has raised fears for continued growth.

June’s rise is far higher than the 3 million jobs many economists forecast would be create last month.

However, separate Labor Department data also showed that in the week ending 27 June, initial claims for unemployment fell only slightly, to 1.43 million, on the previous week.

Oxford Economics called it a “worryingly small decline”.

Companies, including in populous states like California, Florida and Texas, plan to scale back or delay reopening due to the fresh coronavirus outbreaks, which would hold back hiring.

This week, Federal Reserve chairman Jerome Powell acknowledged the rebound in activity, saying the economy had “entered an important new phase”. But he warned that continuing growth would depend on “our success in containing the virus”.

And despite two straight months of jobs growth, employment is still about 16 million below its pre-pandemic level, with the rate just above 11.1%.

The surge in job creation in the past two months has been attributed to the government’s Paycheck Protection Program, which gives businesses loans that can be partially forgiven if used for wages. But those funds are drying up.

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