By Duncan Smith
American businesses and companies are rapidly rehiring and recalling former workers after being ‘allowed’ to reopen following the coronavirus pandemic, meaning the third quarter is likely to be even bigger and better than the record-setting second quarter.
The U.S. economy added 2.5 million jobs last month as states started to ease lockdown restrictions. The strong employment numbers shocked economists who had forecast nearly 8 million job losses in May.
The jobless rate dropped from 14.7 percent in April to 13.3 percent, well below the consensus estimate of nearly 20 percent. The significant upswing in employment suggests that the U.S. economy turned a corner much faster than expected.
Brett Ryan, senior U.S. economist at Deutsche Bank said it would take several months to understand the underlying strength of the rebound.
'In our view, the unexpected bounce in employment may reflect rehiring ahead of planned reopenings within states that was not quite captured in the initial jobless claims data,' he said in a report.
'The May payroll figure was what we would have expected for June. It will take several more months of data (and revisions) to get a better sense of the underlying pace of the labor recovery,' he noted.
At the same time, the news outlet noted, optimism among small business owners is also rebounding as states and cities continue reopening following the pandemic, the National Federation of Independent Business (NFIB) notes. The optimism index tracked by the NFIB rose 3.5 points in May, reversing much of the decline in April.
Most small businesses that survived the months-long ‘non-essential’ closures are reportedly eager to get reopened and get their workers back on the job. Many are also planning to invest, the NFIB survey revealed.
Joy Gendusa, the founder and CEO of PostcardMania based in Tampa Bay, Fla., said her business is now open and doing much better than she expected it would.
After lifting a hiring freeze last month that was put in place in March, “we have been hiring like crazy,” Gendusa told the news outlet.
'We're already back to a normal range in new leads and sales—even better actually,' she noted, adding that she’s never been more hopeful about the future than now.
'We currently have 13 open positions to fill, 3 being replacements and the other 10 completely new jobs. We're going full-steam ahead.'
In a virtual forum with The Wall Street Journal, White House economic adviser Kevin Hassett said he expects the employers to add another 3.5 million to 4 million jobs in June.
Another good sign: “than 78 percent of unemployed workers in May were on temporary layoff, which suggests that workers remain attached to their prior employers, according to a report by the White House Council of Economic Advisers (CEA),” The Epoch Times noted.
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