The U.S. markets seem to be recovering these days. The Nasdaq Composite managed to reach a new record high today.
The U.S. stock markets rally has been caused by the positive numbers that have come in. Sources say that non-farm payrolls rose by 2.5 million. The unemployment rate fell to 13.3%. This has happened as the jobless expectations were 8.3 million or 19.5%. However, such figures would have made it the worst since the Great Depression. Meanwhile, the Dow Jones Industrial Average (INDEXDJX: .DJI) has added 3.43%, or 902 points, and reached 27,184.26. The S&P 500 (INDEXSP: .INX) goes north by 2.85%. The Nasdaq Composite (INDEXNASDAQ: .IXIC) has risen to 9,841 (+ over 225 points, or 2.34%). It is a new record for Nasdaq.
Sources say that much of the jobs rebound had to do with the temporary claims that came from the hospitality and leisure industry. Despite the new jobs, the jobs market is still 20 million below the pre-coronavirus levels.
U.S. Market Rally Boosts Nasdaq Record
These numbers on a normal day seem anemic but at this time, they offer hope that the U.S. economy will try and recover. It also gives much hope that things will get better.
Speaking on the matter, CNBC’s Jim Cramer said:
“I think there were a lot of people who felt that the layoffs would be permanent and it’s obvious that there’s so much demand that people have to bring people back.”
U.S. President Donald Trump known for his tweets was also very happy to comment the news.
— Donald J. Trump (@realDonaldTrump) June 5, 2020
The job gain is the greatest high since 1939. The only other time job gains moved this fast was in September 1983. The U.S. economy made gains of 1.1 million. Many have been wary of the recovery. Their major fear is that the gains made so far will be wiped out by a second breakout of the coronavirus. Such an event could send the U.S. economy into another spiral.
There is also the case of those who are on Federal benefits and don’t want to go back to work. Due to this welfarist system, many people don’t want to get back to work. This trend may also dig in on the economic recovery that seems to be underway.
This optimism was also dampened by an increase in unemployed. The number increased by 150,000 to 20.7 million. The March losses also went Northward from 881,000 to 1.4 million. The total net job losses were 642,000.
The Numbers are Uneven
The leisure and hospitality industry accounted for about 50% of last months’ rise in jobs. 1.2 million people are returning to work in this sector. In April, there was a loss of 7.5 million jobs. restaurants and bars gained 1.4 million jobs. This is occurring as the states are beginning to ease movement restrictions and social distancing efforts.
The construction industry was next with 464,000. Then education and health services as well with 424,000. Retail also had modest gains of 368,000. This comes after a loss of 2.3 million.
Government jobs were down by 585,000. State and local governments are feeling the heat because of the pandemic.
The recovery while weak is a sign of things to come. The U.S. economy will struggle for a bit until a proper treatment regimen is found and a vaccine discovered.
Christopher Haruna Hamman is a Freelance content developer, Crypto-Enthusiast and tech-savvy individual. He is also a Superstar Content Developer, Strategy Demigod, and Standup Guy.