Projections indicate that the U.S. economy has again surprised experts by adding at least 3 million jobs in May amid partial reopenings in many states, but concerns remain that potential coronavirus flare-ups across the country could put a damper on the numbers for June.
About 2.7 million people went back to work in May, though unemployment filings remain higher than normal, with more than 30 million Americans still out of a job, MarketWatch reported.
The unemployment rate is set to fall to 12% from 13.3% because of these recent positive numbers, while still quite high compared to February’s 3.6% despite the presence of encouraging signs of recovery.
Wall Street analysts suggest that as many as 8 million jobs might have been added in May, according to estimates, MarketWatch noted. All 50 states saw at least partial economic reopenings in May, but there are doubts that all parts of the country will be able to remain open as new coronavirus cases hit record levels in some states, as The Washington Post reports.
Outbreaks threaten recovery
So far, Texas and parts of California have paused their reopenings as new cases have surged and hospitalizations have increased. Other states are seeing high numbers of new infections but no corresponding increase in hospitalizations and deaths.
No new complete shutdowns have yet been announced in the most heavily affected areas, but cutbacks on the permissible capacity for certain kinds of businesses could lead to additional rounds of layoffs.
If public sentiment returns to one of alarm, the impact on already vulnerable businesses could be compounded over the coming weeks.
According to MarketWatch, jobless claims are not falling as fast as expected, though some attribute that to the additional $600 in weekly unemployment compensation provided by the CARES Act, which makes returning to work less lucrative for some than simply continuing to collect benefits, but which is also slated to end no later than July 31.
Cause for optimism
Forbes noted that economists had expected a decline of 8.5 million jobs in May before economies began to reopen, so the projected increase beats expectations by a significant number, providing real cause for optimism.
Unemployment was previously anticipated to come in at roughly 20% for the period, according to Forbes, and so the aforementioned projection of 12% suggests that the American economy is more resilient than many believed.
Despite the specter of substantial numbers of permanent business closures, it appears that most stakeholders in the U.S. economy are refusing to buckle in the face of difficulty, a sure sign that capitalism is not dead yet.
The engine of progress is still going strong in this country, no matter how much Democrats try to stand in the way.