Earlier this month we learned that employment in America continued to bounce back in June, and recently-released regional data from the U.S. Department of Labor confirmed that such improvements occurred across most of the country. In fact, nonfarm employment increased in all 50 states in June, with the largest percentage gains found in Nevada (+8.5 percent), Michigan (+8.1 percent), and Kentucky (+6.6 percent). As for joblessness, the unemployment rate fell in 42 states in June, climbed in 5 states, and remained stable everywhere else. Most of the states that saw joblessness increase last month were in the northeast, while some of the biggest declines in unemployment occurred in the south and out west.
This regional outperformance of the Sun Belt may seem surprising given that the “second wave” of the coronavirus had already started by the middle of June, but a confluence of factors likely made last month’s employment report particularly noisy. The payrolls data for July (released in August) will therefore be much more telling as to whether this latest uptick in positive COVID-19 cases is going to meaningfully affect the labor market rebound. As we saw last week unemployment insurance claims suggest that the pandemic’s resurgence has indeed started to weigh on hirings. Such weakness, though, could also be brief if this latest outbreak soon subsides, and there have even been some encouraging signs that the growth rate in positive cases may be slowing in a few “hot spot” states. Further, any day a medical breakthrough could be announced that helps dramatically tip the scales in our favor in the fight against COVID-19. However, many unknowns remain, and even though the U.S. economy seems prime to rebound it will be hard for the recovery to gain any momentum until the spread of the coronavirus is under control.
Sources: U.S. DoL