According to analysts at Wells Fargo, the surprising strength in nonfarm employment and decline in the unemployment rate is more improvement than what they expected to see this soon as businesses start to re-open.
Key Quotes:
“The sudden shutdown in economic activity that quickly spread through the economy in March and early April appears to have eased enough to produce a large net increase in nonfarm employment.”
“While there was some evidence suggesting an improvement was afoot, the financial markets appear to have picked up the scent much better than economists did. Most forecasters have been closely following the weekly initial unemployment claims, which have been trending lower but remain astonishingly high. The trend in continuing unemployment claims looks to be a more accurate guide to employment trends and suggests that employers have called back some workers as businesses re-opened.”
“The unemployment rate fell 1.4 percentage points to 13.3%. Most of that drop was among those recently laid off, as the number of unemployed on temporary layoff fell by 2.7 million.”
“The surprising strength in nonfarm employment and decline in the unemployment rate is more improvement than we expected to see this soon as businesses start to re-open. While the economy is now on the road to recovery, that road is likely to have many twists and turns along the way.”
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