Normalization conditions accelerates the return to work in June

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Normalization conditions accelerates the return to work in June

Payrolls, which is expected to increase by 3 million in June in the US, increased by 4.8 million, while unemployment, which is expected to decrease to 12.3%, decreased to 11.1%. It looks good when the data are evaluated within the normalization process of economies. The increase in the manufacturing industry continues, in June there is an increase of 356 thousand people. Most of the employment gains are in the private sector, with an employment increase of 4,767 million. This is due to the return to work in the normalization process in private sector companies.

In the environment where the unemployment rate fell to 11.1%, at the same time participation rate increased to 61.5%, it is seen that more people are re-involved in the labor market by seeking work. In this process, the discontinuities in calculations were the situation that many people quit not only from work but also from the labor force during the pandemic period layoffs. The long-term unemployment, which is broadly defined, also declined from 21.2% to 18%. Although the average hourly earnings continued to decline with a 1.7% decrease on a monthly basis, the anomaly continues in annual wage inflation due to unusual conditions, a decrease from 6.6% to 5% on an annual basis.

With the opening of the economy in June, there is a return to work that has accelerated. The more normalization can be continued, the faster the return to work will be. Signs that the pandemic may continue are the most important risk of this assumption, but even if the labor market continues to improve, some of the former employment pool will remain idle, still. The Trump administration is considering cutting unemployment benefits of 600 USD, because they think that if this aid, which is higher than the salaries of many workers, continues, many ex-workers would not return to work. Basically, this logic is clogged in two places; First, this was already a temporary aid, and secondly, there is no guarantee that everyone whose unemployment benefits cut will return to work.

Source: Tera Menkul
Hibya News Agency