WASHINGTON: The U.S. economy likely created jobs at a record clip in June as more restaurants and bars resumed operations, which would offer further evidence that the COVID-19 recession was probably over, though a surge in cases of the coronavirus threatens the fledgling recovery.
Federal Reserve Chair Jerome Powell this week acknowledged the rebound in activity, saying the economy had"entered an important new phase and done so sooner than expected." But he cautioned the outlook"is extraordinarily uncertain" and would depend on"our success in containing the virus." Employment is increasing largely as companies rehire workers laid off when non-essential businesses like restaurants, bars, gyms and dental offices among others were closed to slow the spread of COVID-19.
A separate report from the Labor Department on Thursday is expected to show initial claims for state unemployment benefits likely totaled a seasonally adjusted 1.355 million for the week ended June 27 down from 1.48 million in the prior week, according to another Reuters survey of economists. For a more accurate picture of the labor market, economists recommend focusing on continuing claims and data on the total number of unemployment checks recipients. About 30.6 million people were collecting unemployment checks in the first week of June.