Markets are sinking at the open on news from the U.S. Bureau of Labor Statistics that non-farm payrolls lost 467,000 jobs, which beats estimates varying from 367,000 to 400,000, as the unemployment rate rose to 9.5%. The dip was substantially larger than May’s 322,000 loss, boosting the number of those out of work to 14.7 million Americans.
More distressingly, average weekly hours fell from 33.1 in May to 33, which is the reverse of what should be happening in a rebound if employers are pushing workers to stretch out the work week get production going again.
Separately, the U.S. Department of Labor reported that initial claims for unemployment fell last week by 16,000 to 614,000 individuals.
Some sliver of hope is offered this morning by our friends at RDQ Economics, who point out that the headline decline number was made worse by temporary census workers being let go by the Federal government, so that net of that, it’s just a 415,000-individual loss. Also, the firm points out that GDP in the second quarter probably fell 1.5%, compared to a 7.9% annualized drop in hours worked, which suggests, in their view, “a very robust productivity gain.”
Whether and how soon productivity will get people back their jobs, however, remains to be seen.
This morning, the Dow Jones Industrial Average (^DJI) is down 153.57, or 1.8%, to 8350, the S&P 500 (^GSPC) is off 17, or 1.9%, at 905.90, and the Nasdaq (^IXIC) is down 39, or 2%, at 1806.