The survey shows that the U.S. employment population plummeted again in July! The economy may worsen twice

 The survey shows that the U.S. employment population plummeted again in July! The economy may worsen twice

U.S. employment fell by about 6.7 million from mid June to mid July, of which 4.1 million fell from the first week to the second week of July, according to the household pulse survey released by the Census Bureau on Wednesday.

Although this figure is not seasonally adjusted as the main data in the monthly employment report, it has increased by 5.5 million from mid May to mid June, which is consistent with the monthly survey of the employment report of the Ministry of labor and the increase in the number of non quarterly employment since June.

The survey shows that as the epidemic continues to spread in the United States, the employment population in the United States has plummeted. The black line in the figure below represents the number of U.S. jobs in the past seven days

These numbers add to signs of a worsening employment situation in the United States, as a surge in cases across the South and west of the United States has forced officials to suspend or reverse economic restart, and business closures have doubled. There has been a clash between lawmakers over whether to extend unemployment benefits due at the end of the month. Analysts have predicted that although the U.S. non farm payrolls rose by 4.8 million in June, the growth in employment will significantly slow down in July.

Ernie Tedeschi, an economist at evercore ISI, warned: in July, the U.S. non farm sector may not only be cut, but may even be negative. This should make us pause and think about it, because it means that the U.S. economy has not been able to recover sustainably, and may actually be reversed now. Although the family pulse survey is a relatively new survey, it did a good job in forecasting the June employment report.

At 20:30 on July 23, Beijing time, the United States will announce the number of new jobless claims for the week ending July 18. Some analysts forecast 1.3 million, the same as the previous week, the current market forecast range of 1 million to 1.55 million.

At the same time, Kronos, a software and services company, said the growth in shifts slowed in July. In a report, the company said the average increase so far in July was 0.7%, compared with 1.9% in June, indicating that the economic recovery is stable.

American workers will have to wait a month for Trumps payroll tax break

President Trumps support for payroll tax cuts is expected to help workers, but it will take weeks, and the impact may be uneven.

Pete Isberg, vice president of government relations at ADP, the largest U.S. payroll agency, said that if Congress included it in the stimulus bill passed in early August, employers and the IRS would not be able to change the way payroll taxes were levied until at least September 1.

The idea was warmly welcomed by Senate Republicans. Trumps advisers and some lawmakers, including Senator Lindsey Graham, have suggested setting a maximum income threshold for tax cuts. But issberg said it could cause trouble and inequality because the payroll tax system is based on year to date income. Because of the epidemic situation, the income of some workers is not stable, and there is an error in calculating the average income.

Kyle Pomerleau, an economist at the American Enterprise Institute, estimates that if payroll tax cuts start in August, the payroll tax cuts for workers and employers will reach $480 billion by December. After taking into account the decline in economic activity as a result of the continued spread of the epidemic, the figure could be close to $430 billion. But if the payroll tax break is targeted at people earning less than $50000, that figure would be much smaller, about $120 billion.

Huitong reminded that the above information can be seen, because the epidemic continues to hinder the recovery of the U.S. economy, the market believes that the employment population plummeted in July. In addition, Trumps wage tax cut policy will wait for a month to be implemented. The deteriorating labor market situation is expected to push gold prices up and challenge the $1900 mark.

(daily chart of spot gold)