U.S. job market rapidly healing in June, Fed researchers say

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The U.S. labor market has continued to heal at a relatively rapid rate through early June, St. Louis Federal Reserve researchers found, using real-time data that provides a more timely view than official government reports.

Employment has fallen about 8.75% in the week ended June 5 from January levels, making up almost half the decline of 15.08% recorded in mid-April, St. Louis Fed senior economist Maximiliano Dvorkin and research assistant Asha Bharadwaj wrote in a blog posted Tuesday. The estimates rely on daily employment data from Homebase, a scheduling and time-tracking tool mainly used by individually owned and operated businesses in the food and beverage, retail and service industries.

“We predict that the recovery has continued at a healthy pace” through June, the researchers said.

May unemployment unexpectedly declined to 13.3% as employers added 2.5 million workers to payroll, defying expectations for a Depression-style surge in joblessness and stoking optimism the economy is bouncing back from a virus-induced recession. The St. Louis Fed estimates show states are recovering at sharply varying rates as they slowly reopen after shuttering in March to limit the spread of COVID-19.

For example, Mississippi, Missouri and Tennessee had all seen employment declines from January of less than 6% by early June, while New York, which has been a center of the outbreak, had a 14% decrease.

The blog was published as the Federal Open Market Committee began a two-day meeting to discuss the economic outlook and decide on the next steps for monetary policy to bolster the recovery.

Bloomberg News