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Mark O' Donnell
 · 
Research Analyst
July 2, 2020
 · 

US Non-Farm Payroll posts 4.8 Million Jobs in June.

US Non-Farm Payroll posts 4.8 Million Jobs in June.

United States Non-Farm Payroll posts 4.8 Million jobs in June, beating analysts' expectations of a 3 million gain. The unemployment rate also fell to 11.1% in June, forecasted at 12.5%.

Non-Farm Payroll

However, permanent job losses spike

2.1 million of the 4.8 million new jobs were created in the leisure and hospitality sector. However, permanent job losses jumped to 588,000 to 2.8 Million permanent job losses. This is the second-worst month in 20 years for permanent job losses, losing to January 2009 during the Global Financial Crisis.

This is on the back of the United States, topping 2.74 million total Coronavirus cases. Daily new cases increased to 52,600 from 47,000 yesterday. However, President Donald Trump stated that the employment numbers prove that the economy is "roaring back." Donald Trump predicts a resurgence before the November election, with no reference to the state of the Coronavirus in the United States.

The NASDAQ reached a record high, ending at 10,367, a 0.54% gain for the day. Other major indices edge higher, with the SP500 and the Dow Jones posting 0.12% and 0.41% gains, respectively. Interestingly to note, Gold also ended higher with futures ending at $1,788. This may be attributable to investors and traders understanding that the Coronavirus risks, especially in the United States, are still a big threat to the recovery of the economy. This is alongside major fiscal and monetary policies that have helped provide liquidity and elevating equity prices.

NASDAQ in Blue, SPX in Orange, Dow Jones in Teal

Equity markets post record highs and macro-environment tenses

Equity markets, specifically in the United States, have been resilient during an extreme macro environment. Inequality protests dividing the nation, political tensions rising domestically and internationally with the election approaching amongst China's power grab all amidst a pandemic which caused the greatest jobs lost in United States history. With non-farm payroll posting better than expected results over the past two months, a sense of progression in the road of recovery may cloud investors and trader's judgment. Furthermore, with the FED providing virtually unlimited support, it would be reasonable to assume that participation in this market would be met with accommodative conditions.

However, the Coronavirus is still preventing many states from opening. New York is still now allowing in-person dining –from a state that has flattened the Coronavirus curve through the relatively strict lock down. Texas just imposed a mandatory face mask requirement. Florida records its highest death rate. Permanent jobs lost in the United States are still increasing. Investors and traders need to tread carefully before investing their hard-earned dollars into these propped-up markets.

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