Unemployment rises in US, hits post-World War high of 14.7%

Market reaction to the historic jobs report was mixed. Long-dated treasuries sold off; with the benchmark 10-year bond yield rising roughly 0.03 percentage points to 0.66 per cent. The more policy-sensitive two-year note gained slightly, sending its yield lower to 0.13 per cent. Yields fall when prices rise.

US equity futures held onto earlier gains, pointing to 1 per cent rise in the S&P 500 when trading commences. The dollar index was unchanged.

Efforts to curb the spread of the pandemic, which has killed more than 70,000 Americans to-date, began in March. States began to introduce social distancing measures and close non-essential businesses and resulted in more that 33m Americans filing for first-time unemployment benefits and ended the longest running US economic expansion on record.

The Donald Trump administration and Congress have sought to support businesses and Americans through the near $3tn stimulus package; which includes relief cheques for taxpayers and $660bn in loans earmarked for small businesses; aimed at keeping employees on the payroll.

However, job losses in battleground states like Michigan and Pennsylvania, that helped propel Donald Trump to victory in 2016; could have major implications for the president who had staked his re-election bid on a strong economy.

Culled: Financial Times


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