Today, we look at the June employment report as well as every
Mets fan’s favorite day.
U.S. payrolls rose by 850,000 last month, much better than the 706,000 expected, and the most since August 2020. That’s not the only good news, as May’s employment gain was revised up from 559,000 to 583,000. The only bit of negative news in the June report (and it’s not that negative) was a slight increase in the unemployment rate, from 5.8% to 5.9%.
After two very disappointing reports for April and May, it looks like the labor market is finally firing on all cylinders. The big question is why did it take so long, when the number of job openings was at record levels the past few months?
Was it that employment benefits were too generous, making it more advantageous for many to stay home? Or was it childcare issues, since many kids were remote learning, or was it just people afraid of getting COVID-19?
25 states tried to address the first reason, by dropping out of the federal unemployment benefits before they expire in September. We don’t have enough data to determine how big a role this played in the June jobs surge, but I think it should get part of the credit.
With the deadline for the other states just two months away, many economists are expecting over one million jobs to be added in each of the next two months as people rush to find work. Childcare issues should be helped by a return to in-school learning for many kids this year, and increased vaccinations could help lessen fears of returning to work.
One thing’s for sure: Companies desperately need workers. Job openings hit a record 9.3 million in April, and employers continue to offer signing bonuses and other perks to fill open positions. Layoffs have subsided, as weekly jobless claims fell to a pandemic-era low of 364,000 last week.
The economy is booming, and I think we’ll see some very strong job gains this summer.
Yesterday was a day all us Yankees fans look forward to, because each July 1 through 2035, the Mets have to pay Bobby Bonilla $1,193,248.20. Ha.
How did this happen, and what does this have to do with economics or finance?
In 2000, the Mets bought out the remaining $5.9 million of Bonilla’s contract, but instead of just giving him that money, they agreed to make 25 annual payments of almost $1.2 million.
Why would the Mets do this?
Well, because they’re the Mets. Here’s where the finance part comes in.
As you may know, Mets ownership was heavily invested with Bernie Madoff, who was promising them amazing returns on their investments. So, they figured, why pay now when we’ll have truckloads of money later? They already had made a similar arrangement to pay Brett Saberhagen $250,000 a year for 25 years.
The new Mets owner Steve Cohen is trying to put a positive spin on this, even suggesting a Bobby Bonilla Day each year. I guess Cohen can laugh about it, since his net worth is currently $16 billion.
Have a great weekend.