Last month was the biggest single-month job gain in U.S. history.
According to CNBC, nonfarm jobs increased by a spectacular 4.8 million—almost doubling expectations. And the American unemployment rate dropped to a completely surprising 11.1%.
Just like the month before, June shattered all predictions. Even more so as the nation continues to battle an ongoing crisis in its streets and within its hospitals. And as those COVID-19 numbers climb and rioters continue to vandalize—it is welcomed good news.
However, as Michael Pearce, senior U.S. economist at Capital Economics points out, it is still 9.6% short of where employment was the beginning of the year. Millions of Americans still file for unemployment every week as joblessness continues to plague all fifty states. And the reported unemployment numbers are still prone to counting errors and “classification” considerations, as mentioned.
But June’s numbers offered solace. We saw retail regain 740,000 jobs, health services and education gained 568,000—and healthcare added another 358,000.
Around the world, the news is not as rosy for everyone. The unemployment rate actually rose in June for many euro-countries like Spain, Italy, France and Germany totaling about 847,000 more people without jobs than in the previous month. Many countries are not even aware of their status for last month. Canada, for instance, has yet to release their June numbers following their May report of 13.7%—the highest of all 7 countries in G7. Sweden also sat at 8.03% following an increase from the previous month . Brazil is also sitting at 12.9%, as the world awaits their June numbers.
Like in America, however, it is hard to interpret those figures with confidence. For instance, Spain’s fruit picking season is ending, which contributes to their numbers. But Spain also saw 1.2 million workers return to work in June—which is good— and it means the exact state of affairs is tough to pinpoint.
But, overall, the joblessness reports may indicate that the world economies are on the right track, going forward. Experts (as usual) predict it is far worse. And it may be. One headline—released just days after the glowing Labor Department Report said,
“Unemployment Expected to Reach Highest Level Since Great Depression”
They may be right. The Coronavirus is still running rampant as we all await a vaccine. But for now, for most, June provided some promise.
So, getting back to America, what does the greatest job gain in U.S. history mean?
It means you should continue to keep your investment as is.
Not falling prey to headline siren calls or job reports is just as important during good months as in bad. Especially because it’s hard to tell what the next month will bring. No matter what the Labor Department says or what the media touts, you are far better off investing in a globally diversified mix of index funds and rebalancing, as necessary. So, no matter what’s around the corner, you already know your course of action.