Trump Praises June Jobs Data, Tries To Downplay Second Wave

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June NFPs Highest on Record

The latest US jobs report, released a day early yesterday ahead of the holiday weekend in America, marked yet a further, dramatic recovery in employment last month. The headline June NFPs marked a bumper growth of 4.8 million jobs last month. This increase, which is the largest monthly jobs gain on record, marks an extension from the prior month’s 2.5 million jobs and was well above the 3.3 million forecast.

The US unemployment rate, which had spiked to highs of over 19% when the lockdowns were first introduced, has now recovered to 11.1%, close to halving over the last two months. The economy appears to be recovering at a far quicker pace than the Fed is projecting, helping to lift sentiment among investors.

While the report was not totally bullish; average hourly earnings decreased further to -1.2% from the prior month’s -1%, the headline figure was certainly sensational enough to lead Trump to call a last-minute press conference lauding praise on the rebound.

Speaking at the briefing, Trump called the jobs data “spectacular news” and said the economy is “roaring back” and the “stock market is soaring”. In a clear attempt to discredit Biden, Trump went on to say: “If you want to raise taxes, your 401Ks will drop down to nothing, and your stock market will drop down to nothing.”

Trump Reluctantly Comments on COVID-19

While Trump was quick to praise the rebound in the economy, there was no escaping the growing sense of doom around the dramatic increase in new COVID-19 infections seen across the country in recent weeks. The US has been seeing new infections of over 50k a day over the last week, leading to business restrictions being reintroduced in California and Texas postponing further reopening of its economy for now.

Source: Worldometers

Trump has not been particularly vocal on the subject over recent weeks and when questioned at the briefing yesterday, dismissed the flare up as “temporary flare ups”, adding that without him, “millions would have been lost”. Trump was eager to turn the conversation back towards the economic recovery saying that the “incredible news” was the result of his administration’s efforts “to rescue the U.S. economy from a horrible event that was formed, took place in China, and came here. And they could have stopped it. They could have stopped it.  Nobody likes to write that, but they could have stopped it.”

US COVID-19 Cases Spiking

However, despite Trump’s attempts to deflect attention away from the virus, the news of record spikes in new infections is creating a great deal of fear. Texas and Georgia have both seen their highest daily spikes last week since the pandemic began along with Arizona which also saw its highest number of deaths since the crisis started. With nationwide, daily new cases topping 52k this week, the threat of a significant escalation in the outbreak means that further lockdown measures are likely to be reintroduced. However, this will most likely come on a state by state basis as there has been no government order to close the country down so far. The lack of upside in equities on the back of yesterday’s jobs report, however, reflects a serious failing of belief and the downside risks look to be building firmly.

Technical Views

DOW JONES (Bearish below 24518, Bullish above 27094)

From a technical perspective. The DOW has failed to break back above the rising trend line from year to date lows. While the yearly S1 at 24518 continues to hold as support for now, failure to break back above the 27094 level in the near term raises downside risks.

Trump Praises June Jobs Data, Tries To Downplay Second Wave

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