On Friday morning, the Department of Labor delivered much-needed good news. D.O.L’s Bureau of Labor Statistics reported an amazing, record-setting increase in employment, as 2.5 million jobs were added in the month of May. This was the biggest one-month job increase in recent United States history. The unemployment rate fell to 13.3%, which is still high by historical standards.
As states have eased up on onerous Covid-19-related restrictions, businesses have started bringing back workers and hiring new employees. The United States saw a sharp spike higher in new jobs created in the leisure and hospitality, education, health and retail sectors. Construction and manufacturing resumed operations and saw big increases in employment.
The stock market, which has shot up since the initial shocks of the Covid-19 pandemic, bolted up Friday morning gaining over 700 points, representing about 3%, on the Dow Jones Average.
The jobs report results are in stark contrast to previous economists’ predictions. They claimed that the U.S. would lose up to 8 million jobs. As long as I’ve written these pieces, the so-called professional economists have been consistently wrong.
Many Americans critically questioned why the stock market rose, as most people felt that things were terrible. They pointed to the alarming number of over 40 million Americans who lost jobs since the beginning of the pandemic, rise in wealth inequality as CEOs—such as Amazon’s Jeff Bezos—saw their fortunes grow even larger, killing of George Floyd, peaceful protests that were hijacked by nefarious types who looted, incited violence, property destruction and mayhem, along with incidents of police brutality.
Wall Street professionals contend that the stock market is unemotional. It doesn’t look at the current state of affairs. Instead, investment professionals are forward-looking and bet their money that things will be better in the future.
It feels like we’ve turned a corner. Despite all of the negatives, we’re seeing rays of hope. Racial injustices have been brought to the forefront and most Americans and corporations seem to be in agreement that positive changes need to be enacted. Cracks in our economy and government have been exposed and now we have the chance to work on fixing them.
Working from home is becoming a new reality, which offers a better, more balanced lifestyle. It may also open the door for job seekers to apply at companies all over the country rather than be forced to solely select opportunities based on the convenience of the daily commute. People who felt stuck living in high-cost, dirty, crowded cities may now be able to move somewhere else that they’d prefer and work remotely.
We’ve reinvented our space program. Elon Musk’s SpaceX successfully launched its first private-sector American crew into orbit. This may bring in a new era of spaceflight. When American astronauts went to the moon, it stimulated the economy creating new technologies and business servicing the blossoming industry and job creation followed.
Sensing new opportunities, smart entrepreneurs began new businesses. Much-need money is flowing into healthcare, medical products, new pharmaceutical discoveries, biotech and other sectors to help address Covid-19 and prevent or manage future outbreaks.
There’s something in business called “the animal spirits.” This refers to an intangible mindset. When things start looking positive, it builds upon itself. Inspired by the unexpected increase in jobs and a strong stock market, companies that were in a holding pattern will commence with new business lines. Hiring may pick up as confidence is improving. Workers going back to work will spend, which will help stimulate the economy. There’s talk of additional government-backed stimulus packages, which will help push the economy and job market forward.
People who’ve lost their jobs or been furloughed have said that they won’t return just yet. They point to the increase in the unemployment benefits, which makes them earn more money by not working than working. Once the enhanced $600 per week ends in July, it’s anticipated more furloughed workers will return to the workforce—further pushing down the unemployment numbers and increasing employment.
After months of bad news, fear and distress, this may be the turning point where America starts working again.