U.S. Adds 4.8 Million Jobs In June, But Mixed Indicators for Michigan

The U.S. economy added 4.8 million jobs in June after millions more were laid off due to coronavirus-related closures.

“The stock market is not turning out to be a great predictor of where the general economy is going, or frankly where it is at any given moment.” — Sandy Baruah, Detroit Regional Chamber

But not all signs point to a sustained recovery. Consumer sentiment is still down 20 percentage points from this time last year, and Michigan recently regressed in it’s containment of COVID-19, shutting down indoor seating at bars after recent spikes in infections.

Sandy Baruah, President of the Detroit Regional Chamber, says that the health of economy relies on the health of the population. 

“Overall Michigan has done a terrific job of not only flattening the curve but driving the curve down,” Baruah says. “I tell our members all the time that our job, as the Regional Chamber, is to do everything we can to keep your businesses open. And in order to keep your businesses open, we need to keep the level of infection and transmission as low as possible.” 

He says that Michigan lags the national economy in good times and bad, and points to a series of measures he finds reliable in predicting the short-term economy.

Click on the player above to hear the Detroit Regional Chambers Sandy Baruah on the effect COVID-19 has had on Michigan’s economy.

Alex McLenon, 101.9 WDET: Where does Michigan fall in comparison to the national jobs report? Is it a fair reflection of where the state is at? 

Sandy Baruah, Detroit Regional Chamber: Michigan traditionally has a more challenging economic and employment picture than the nation on average. That is proving to be true with this particular downturn as well. Our unemployment rate is generally higher than what we’re seeing at the national level, but that’s in good times and in bad times. 

Consumer sentiment went up in June but was still down 20 points from where it was last year, pre-COVID. Is that number a better reflection than the jobs report when it comes to evaluating where Michigan is at, or does it face a similar problem?  

No, actually I think the consumer confidence number is a better number to keep an eye on because that does a pretty good job of predicting short term spending.  

If consumers are willing and able to spend, that is a very good sign. It means they have money to spend and they’re willing to spend it. That’s what’s going to drive employment and the overall health of the economy. 

Before COVID-19 really hit in the US, we were seeing the stocks take a huge hit. Are there any kind of precursors like that people should be watching for as a sign of where things are going, or is it still, like you said, a fluid situation? 

The stock market is not turning out to be a great predictor of where the general economy is going, or frankly where it is at any given moment. There is a growing disconnect between those two things. 

I think if you really want to look at future predictions, you mentioned consumer confidence. That’s a good number. There are a lot of national purchasing trend surveys that are really good to look at too.  So what are businesses getting ready to purchase? That’s a good sign. Sales of durable goods, like washing machines or automobiles. Are they increasing or decreasing? 

Also, executive confidence. There’s lots of surveys of CEOs, CFOs, and HR managers. If they are confident about hiring and their business going forward, those are all much better predictors of where the economy is going to be in two to four months.