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Business

U.S. job growth roars back, but COVID-19 resurgence spells trouble ahead

WASHINGTON (Reuters) – The U.S. economy created jobs at a record clip in June as more restaurants and bars reopened, but 31.5 million Americans were collecting unemployment checks in the middle of the month, and a resurgence in COVID-19 cases suggested the labor market could suffer a setback in July.

Record spikes in new coronavirus infections in large parts of the country, including the highly-populated states of California, Florida and Texas, have forced several states to scale back or pause reopenings, and send some workers back home.

The flare-up in the respiratory illness, which started in late June and hit bars and restaurants hard, was not captured in the Labor Department’s closely watched monthly employment report published on Thursday because the government surveyed businesses in the middle of the month.

“June may be the calm before the storm,” said Chris Rupkey, chief economist at MUFG in New York. “We cannot be sure the labor market recovery will continue at a speed that is sufficient to put the millions and millions of Americans made jobless in this recession back to work.”

Nonfarm payrolls surged by 4.8 million jobs in June, the largest gain since the government started keeping records in 1939. Payrolls rebounded 2.699 million in May after a historic plunge of 20.787 million in April. Economists polled by Reuters had forecast payrolls would increase by 3 million jobs in June. Still, employment is 14.7 million jobs below its pre-pandemic level.

President Donald Trump, whose opinion poll numbers have tanked as he struggles to manage the pandemic, economic crisis and protests over racial injustice four months before the Nov. 3 election, hailed the job gains as proof “our economy is roaring back.”

Though the second straight month of strong hiring added to a stream of data, including consumer spending, in suggesting that the recession which started in February was likely over, that is all in the rear-view mirror as COVID-19 cases soar.

Federal Reserve Chair Jerome Powell this week said the economic outlook “is extraordinarily uncertain” and would depend on “our success in containing the virus.”

Hiring last month was boosted by the typically low-paying leisure and hospitality industry, which brought back 2.1 million jobs, accounting for about two-fifths of the rise in payrolls. But the return of these workers pushed down average wages 1.2% in June. Companies also cut wages and hours. The average workweek dropped to 34.5 hours from 34.7 hours in May.

The measurement of the unemployment rate continued to be biased down by people incorrectly misclassifying themselves as being “employed but absent from work” last month.

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The jobless rate fell to 11.1% in June from 13.3% in May. The Labor Department’s Bureau of Labor Statistics, which compiles the employment report, said the unemployment rate would have been 12.1% without the misclassification problem. The rate is 7.6 percentage points above its February level.

Stocks on Wall Street rallied, with the Nasdaq hitting an all-time high. The dollar .DXY edged up against a basket of currencies. U.S. Treasury prices were mixed.

BROAD JOB GAINS

Jobs also returned in the retail, education and health, manufacturing, construction, professional and business services sectors, transportation and warehousing, wholesale trade and financial activities sectors.

Local governments hired teachers and support staff. But state governments, confronting reduced revenues and stressed budgets caused by the pandemic, laid off more workers. There were further job losses in mining.

Economists have attributed the burst in job gains to the government’s Paycheck Protection Program, giving businesses loans that can be partially forgiven if used for wages. Those funds are drying up and many companies, including some not initially impacted by lockdown measures, are struggling with weak demand, forcing them to lay off workers.

Economists and industry watchers say this, together with the exhaustion of the PPP loans, has triggered a new wave of layoffs, that is keeping weekly new applications for unemployment benefits extraordinarily high.

In a separate report on Thursday, the Labor Department said initial claims for state unemployment benefits fell 55,000 to a seasonally adjusted 1.427 million for the week ended June 27. Including a program funded by the federal government, 2.3 million people applied for benefits last week.

The number of people receiving benefits after an initial week of aid rose 59,000 to 19.290 million in the week ending June 20. These so-called continued claims, which are reported with a one-week lag.

There were 31.5 million people collecting unemployment checks in mid-June, up 916,722 from the first week of the month.

With the measurement of the unemployment rate continuing to be distorted since March, economists recommend focusing on continuing claims and data on the total number of unemployment checks recipients to get a better view of the labor market.

“The risks to the labor market are clearly tilted to the downside,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics in New York.

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Business

Record U.S. job growth expected in June, but masks labor market weakness

WASHINGTON (Reuters) – The U.S. economy likely created jobs at a record clip in June as more restaurants and bars resumed operations, which would offer further evidence that the COVID-19 recession was probably over, though a surge in cases of the coronavirus threatens the fledgling recovery.

The Labor Department’s closely watched monthly employment report on Thursday would add to a stream of data, including consumer spending, showing a sharp rebound in activity.

But the reopening of businesses after being shuttered in mid-March has unleashed a wave of coronavirus infections in large parts of the country, including the populous California, Florida and Texas.

Several states have been scaling back or pausing reopenings since late June and sent some workers home. The impact of these decisions will not show up in the employment data as the government surveyed businesses in the middle of the month.

Federal Reserve Chair Jerome Powell this week acknowledged the rebound in activity, saying the economy had “entered an important new phase and (had) done so sooner than expected.” But he cautioned the outlook “is extraordinarily uncertain” and would depend on “our success in containing the virus.”

“As the economy is reopening a lot of the jobs lost have come back and activity is coming back as well,” said Steven Blitz, chief U.S. economist at TS Lombard in New York. “The problem is the virus still has a big say in determining the trajectory of the recovery.”

According to a Reuters survey of economists, nonfarm payrolls likely increased by 3 million jobs in June, which would be the most since the government started keeping records in 1939. Payrolls rebounded 2.5 million in May after plunging by a historic 20.687 million in April.

Despite two straight months of eye-popping gains, employment would still be about 16.6 million jobs below its pre-pandemic level. The unemployment rate is forecast dipping to 12.3% from 13.3% in May.

Employment is increasing largely as companies rehire workers laid off when non-essential businesses like restaurants, bars, gyms and dental offices among others were closed to slow the spread of COVID-19.

Economists have attributed the burst in job gains to the government’s Paycheck Protection Program, giving businesses loans that can be partially forgiven if used for wages. Those funds are drying up.

LAYOFFS STILL ELEVATED

In an economy that had already fallen into recession as of February, many companies, including some not initially impacted by lockdown measures, are struggling with weak demand.

Economists and industry watchers say this, together with the exhaustion of the PPP loans, has triggered a new wave of layoffs that is keeping weekly new applications for unemployment benefits extraordinarily high.

A separate report from the Labor Department on Thursday is expected to show initial claims for state unemployment benefits likely totaled a seasonally adjusted 1.355 million for the week ended June 27 down from 1.48 million in the prior week, according to another Reuters survey of economists.

“Job losses are starting to bleed to other sectors of the economy, income groups and different skill sets,” said Mark Zandi, chief economist at Moody’s Analytics in West Chester, Pennsylvania.

The claims report is also expected to show the number of people receiving benefits after an initial week of aid likely fell to 19 million in the week ending June 20 from 19.5 million the week before. These so-called continued claims, which are reported with a one-week lag, have dropped from a record 24.912 million in early May.

For a more accurate picture of the labor market, economists recommend focusing on continuing claims and data on the total number of unemployment checks recipients. About 30.6 million people were collecting unemployment checks in the first week of June.

The jobless rate, which is the more standard measure of unemployment, has been biased down since March by people incorrectly misclassifying themselves as “employed but absent from work.” The Labor Department’s Bureau of Labor Statistics has been working with the Census Bureau to rectify this.

Without the misclassification issue, the unemployment rate would have been 16.3% in May instead of 13.3% and would have peaked at about 19.7% in April.

Job gains last month were likely concentrated in the typically low paying leisure and hospitality industry. The return of these workers is expected to have further depressed average wages in June. Some companies are cutting wages and reducing hours. Average hourly earnings are forecast declining 0.7% after dropping 1.0% in May. The average workweek is expected to dropped to 34.5 hours from 34.7 hours.

States and local governments likely laid off more workers as they confront reduced revenues and stressed budgets caused by the pandemic.

“A federal government failure to aid state and local governments and avoid income cliffs over the summer would further jeopardize the recovery,” said Lydia Boussour, a senior U.S. economist at Oxford Economics in New York.

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Business

Record U.S. job growth expected in June, but masks labor market weakness

WASHINGTON (Reuters) – The U.S. economy likely created jobs at a record clip in June as more restaurants and bars resumed operations, which would offer further evidence that the COVID-19 recession was probably over, though a surge in cases of the coronavirus threatens the fledgling recovery.

The Labor Department’s closely watched monthly employment report on Thursday would add to a stream of data, including consumer spending, showing a sharp rebound in activity.

But the reopening of businesses after being shuttered in mid-March has unleashed a wave of coronavirus infections in large parts of the country, including the populous California, Florida and Texas.

Several states have been scaling back or pausing reopenings since late June and sent some workers home. The impact of these decisions will not show up in the employment data as the government surveyed businesses in the middle of the month.

Federal Reserve Chair Jerome Powell this week acknowledged the rebound in activity, saying the economy had “entered an important new phase and (had) done so sooner than expected.” But he cautioned the outlook “is extraordinarily uncertain” and would depend on “our success in containing the virus.”

“As the economy is reopening a lot of the jobs lost have come back and activity is coming back as well,” said Steven Blitz, chief U.S. economist at TS Lombard in New York. “The problem is the virus still has a big say in determining the trajectory of the recovery.”

According to a Reuters survey of economists, nonfarm payrolls likely increased by 3 million jobs in June, which would be the most since the government started keeping records in 1939. Payrolls rebounded 2.5 million in May after plunging by a historic 20.687 million in April.

Despite two straight months of eye-popping gains, employment would still be about 16.6 million jobs below its pre-pandemic level. The unemployment rate is forecast dipping to 12.3% from 13.3% in May.

Employment is increasing largely as companies rehire workers laid off when non-essential businesses like restaurants, bars, gyms and dental offices among others were closed to slow the spread of COVID-19.

Economists have attributed the burst in job gains to the government’s Paycheck Protection Program, giving businesses loans that can be partially forgiven if used for wages. Those funds are drying up.

LAYOFFS STILL ELEVATED

In an economy that had already fallen into recession as of February, many companies, including some not initially impacted by lockdown measures, are struggling with weak demand.

Economists and industry watchers say this, together with the exhaustion of the PPP loans, has triggered a new wave of layoffs that is keeping weekly new applications for unemployment benefits extraordinarily high.

A separate report from the Labor Department on Thursday is expected to show initial claims for state unemployment benefits likely totaled a seasonally adjusted 1.355 million for the week ended June 27 down from 1.48 million in the prior week, according to another Reuters survey of economists.

“Job losses are starting to bleed to other sectors of the economy, income groups and different skill sets,” said Mark Zandi, chief economist at Moody’s Analytics in West Chester, Pennsylvania.

The claims report is also expected to show the number of people receiving benefits after an initial week of aid likely fell to 19 million in the week ending June 20 from 19.5 million the week before. These so-called continued claims, which are reported with a one-week lag, have dropped from a record 24.912 million in early May.

For a more accurate picture of the labor market, economists recommend focusing on continuing claims and data on the total number of unemployment checks recipients. About 30.6 million people were collecting unemployment checks in the first week of June.

The jobless rate, which is the more standard measure of unemployment, has been biased down since March by people incorrectly misclassifying themselves as “employed but absent from work.” The Labor Department’s Bureau of Labor Statistics has been working with the Census Bureau to rectify this.

Without the misclassification issue, the unemployment rate would have been 16.3% in May instead of 13.3% and would have peaked at about 19.7% in April.

Job gains last month were likely concentrated in the typically low paying leisure and hospitality industry. The return of these workers is expected to have further depressed average wages in June. Some companies are cutting wages and reducing hours. Average hourly earnings are forecast declining 0.7% after dropping 1.0% in May. The average workweek is expected to dropped to 34.5 hours from 34.7 hours.

States and local governments likely laid off more workers as they confront reduced revenues and stressed budgets caused by the pandemic.

“A federal government failure to aid state and local governments and avoid income cliffs over the summer would further jeopardize the recovery,” said Lydia Boussour, a senior U.S. economist at Oxford Economics in New York.

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World News

‘Stop the talks, Boris!’ Britons FURIOUS as ‘panicking’ Angela Merkel issues warning to PM

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Mrs Merkel is urging EU negotiator Michel Barnier to play hardball by demanding “more realism” from the UK. Speaking today, Mrs Merkel’s ambassador in Brussels, Michael Clauss, said the German Chancellor was pushing for concessions from Mr Johnson to make it easier for her to convince fellow European Union leaders to back a compromise.

However, Facebook users posting on Express.co.uk’s page were unconvinced.

Bob Crowley commented: “The economy is pants at the moment.

“Now is the time to walk away, as it will only get better from there, WTO is the only way, ditch this corrupt bunch.”

Ian Howard agreed, posting: “Stop the talks Boris! The EU wishes to hobble the UK to prevent further implosion.

“Whole idea of getting out is so we are NOT covered by EU rulings!”

Terry Good said: “Who is this Angela Merkel that she thinks she is in charge?

“Boris, tell her to go and look after the people she is supposed to be helping, not to interfere in something that does not concern her, okay???”

Pat Patrick added: “I think we all remember when Cameron went cap in hand, before the referendum, to ask her for concessions.

“He was sent packing and the rest is history. Now she is asking for the UK to give a little.

“Well her words are too little, too late.”

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Meanwhile Charlie Port suggested Mrs Merkel was motivated by self-interest.

He explained: “She is running scared! 

“As it’s clear that Germany will have to pick-up the bill in future.”

“Also if she can’t get a deal then there are going to be other countries that will leave and her dream of a German Dominated Europe will be over.”

Similarly, Graham Everett urged: “Boris don’t give in. Germany is now panicking because of their car industry and other company’s that sell into the UK.

“They are in a massive recession. We have them on the run.

“The French need our fish so sell it to them at market rates.”

Speaking about the talks today, Mrs Merkel told the German Parliament: “Progress in talks is, to put it cautiously, very limited.

“We have agreed with Britain to speed up the talks in order to seal a deal in the autumn that must be ratified by the end of the year.”

However, she admitted Germany and the EU “must be prepared for the possibility that a deal doesn’t materialise”.

The UK negotiators have been in crunch meetings with their EU counterparts all week, after both sides agreed to intensify discussions.

They met this week face to face for the first time in months due to the ongoing coronavirus pandemic.

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World News

China flu strain causes fresh alarm as WHO issues dire warning over pandemic

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The study, published on Monday by the National Academy of Sciences, claimed the pathogen was a worsening issue in pig farms. The paper added that the virus has “all the hallmarks” of being propitious for human transmission.

It comes ten years after a swine flu pandemic was estimated to have killed up to 284,000 people.

The researchers said the capability of the new pathogen – named G4 EA H1N1 – to acclimate would raise “concerns for the possible generation of pandemic viruses”.

Asked about the report at a briefing in Geneva today, WHO spokesman Christian Lindmeier said: “We will read carefully the paper to understand what is new.

“It also highlights we cannot let our guard down on influenza and need to be vigilant and continue surveillance even in the coronavirus pandemic.”

The study was carried out between 2011 and 2018.

Researchers took 30,000 nasal swabs from pigs in abattoirs in ten Chinese provinces and one veterinary facility.

“Close monitoring in human populations, especially the workers in the swine industry, should be urgently implemented,” the paper said.

“It is of concern that human infection of G4 virus will further human adaptation and increase the risk of a human pandemic.”

READ MORE: Trump embarrassment as Republican Party split on face masks

From the tests, 179 different swine flu viruses were identified.

One of the viruses was G4 EA H1N1 which was later found to be highly contagious.

The alarm was raised when it was found that the immunity humans build up to regular seasonal flu does not protect against G4 EA H1N1.

Some abattoir workers – 10.4 percent – had developed the antibodies to fight off the new virus thanks to their exposure to it.

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Within the general population, only 4.4 percent were found to have gained the antibodies.

According to the findings, the pathogen can be transmitted from animals to humans, but it is unknown whether it can be transmitted between humans.

The Spanish flu pandemic in 1918 is thought to have been passed to humans from pigs.

The pandemic originated in America and it infected an army camp.

When the servicemen at the camp were sent out to France to fight in World War One, the virus started to spread across Europe.

Reiterating the WHO’s warning, Prof Kin-Chow Chang of the University of Nottingham told the BBC: “Right now we are distracted with coronavirus and rightly so.

“But we must not lose sight of potentially dangerous new viruses.”

Chinese Foreign Ministry spokesman Zhao Lijian was asked about the findings at a regular press briefing on Tuesday.

“China is closely following the developments in regard to this matter.” Mr Zhao said.

“We will take all necessary measures to prevent the spread and outbreak of any virus.”

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World News

Emmanuel Macron NIGHTMARE: French President issued devastating economic warning

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The country’s Court of Auditors has called for a “long-term” plan to control public debt, which has been tipped to reach 120.9 percent of GDP – in other words, a fifth more than all the wealth the country produces in the course of a year. Led by President Pierre Moscovici, the Court of Auditors, which has responsibility for conducting financial and legislative audits of most public institutions, highlighted the dire situation in its annual report, published today.

The document states: “The spontaneous rebalancing of public accounts will, in all likelihood, only be partial.

“Without recovery action, the deficit risks being very high for a long period.

“The debt trajectory would then not be under control.”

Government forecasts are suggesting GDP could fall by 11 percent in France this year, with the government banking on renewed growth to reduce the national debt, having pledged not to increase taxes.

The Court of Auditors has drawn up three scenarios for the recovery of activity, with the most optimistic not foreseeing a return to pre-crisis debt levels – just under 100 percent of GDP – for a decade.

The report warns against expectations in relation to economic growth, stressing that “an effort to structurally restore public finances must be undertaken” as soon as economic conditions permit.

It adds: “It must not be too brutal not to break the recovery, but it must be pursued constantly to obtain tangible results”.

An “in-depth” review of public spending to prioritise investment spending, coupled with an “increased effort to control other spending” is necessary.

In addition, the recovery plan which the government plans to deploy at the start of the school year will need to contain “temporary” and targeted support actions, without funding from an increase in public debt, the Court said.

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Speaking earlier this month, Mr Macron said: “The summer of 2020 will not be a summer like any other and we will have to keep watch over the evolution of the epidemic.”

The priority was to “rebuild a strong, ecologic, sovereign and fair economy”, he said, “drawing on all the lessons” of the pandemic.

He added: “This ordeal also revealed our flaws, our weaknesses: our dependence on other continents to obtain certain products, our cumbersome organisation, our social and territorial inequalities.”

Speaking earlier this month, Mr Macron said: “The summer of 2020 will not be a summer like any other and we will have to keep watch over the evolution of the epidemic.”

The priority was to “rebuild a strong, ecologic, sovereign and fair economy”, he said, “drawing on all the lessons” of the pandemic.

He added: “This ordeal also revealed our flaws, our weaknesses: our dependence on other continents to obtain certain products, our cumbersome organisation, our social and territorial inequalities.”

BFM TV and Agence France Presse earlier reported 7,500 looming job cuts.

Air France declined to comment on layoffs plans.

(Additional reporting by Maria Ortega)

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Business

Top U.S. House Republican resists extending coronavirus unemployment benefits

WASHINGTON (Reuters) – The top Republican in the U.S. House of Representatives said on Tuesday it would not be productive to extend extra unemployment benefits that were included in coronavirus relief legislation earlier this year but that expire on July 31.

“I don’t think it’s productive to extend the added money from the federal government. We’re finding numerous people… that it’s becoming a hardship for individuals to go back to work,” House Minority Leader Kevin McCarthy told a news conference.

Republicans and Democrats have been debating over what else needs to be done to help the country recover from the economic effects of the novel coronavirus, which led to business closures that left millions of Americans out of work.

McCarthy was referring to statistics showing many Americans are paid more thanks to the extended unemployment benefits than they earned when they were at work.

Instead, he said, the focus should be on getting people back to work.

“We want incentives. We want all Americans to work. So our focus is to rebuild, to renew and restore America,” McCarthy said.

The loss of the safety net of $600 per week looms well before a sustained recovery is likely to take hold from the sudden and deep recession brought by the pandemic. Personal income dropped 4.2% in May.

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Business

U.S. consumer confidence perks up; rising COVID-19 cases cast shadow over recovery

WASHINGTON (Reuters) – U.S. consumer confidence rebounded in June as businesses reopened, strengthening views that the economic downturn was likely over, though rising COVID-19 infections threaten to derail the budding recovery.

The survey from the Conference Board on Tuesday followed a sharp surge in hiring and consumer spending in May. The housing market and manufacturing have also improved.

Federal Reserve Chair Jerome Powell on Monday acknowledged the rebound in activity, saying the economy had “entered an important new phase and (had) done so sooner than expected.”

In remarks prepared for a congressional hearing on Tuesday, the U.S. central bank chief cautioned that the economic outlook “is extraordinarily uncertain” and would depend on “our success in containing the virus.”

The economy slipped into recession in February. Businesses have largely reopened after being shuttered in mid-March to slow the spread of the coronavirus. Large parts of the country, including densely populated California, Texas and Florida have reported a surge in cases of the respiratory illness. Some states are scaling back or pausing business reopenings.

“The long road to normalcy is miles and miles away and the journey is a hazardous one as already a second wave of the pandemic virus has made some states backtrack on their reopening plans,” said Chris Rupkey, chief economist at MUFG in New York.

The Conference Board said its consumer confidence index rose to a reading of 98.1 this month from 85.9 in May. Still, the confidence index remains 34.5 points below its pre-pandemic level.

Economists polled by Reuters had forecast the index rising to 91.8 in June.

The survey’s present situation measure, based on consumers’ assessment of current business and labor market conditions, increased to a reading of 86.2 this month from 68.4 in May.

The expectations index based on consumers’ short-term outlook for income, business and labor market conditions jumped to 106.0 from a reading of 97.6 in May.

Stocks on Wall Street were trading higher on the confidence data. The dollar was lower against a basket of currencies. U.S. Treasury prices were marginally lower.

LABOR MARKET SENTIMENT IMPROVES

The Conference Board’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, improved to a reading of -3 this month from -12.7 in May. That measure closely correlates to the unemployment rate in the Labor Department’s employment report.

It has dropped from as high as 38.3 in August last year.

The pandemic has unleashed record unemployment, with 30.6 million people collecting unemployment checks in the first week of June. The closely followed employment report to be released on Thursday is expected to show 3 million jobs created in June on top of the 2.5 million added in May, according to a Reuters survey of economists.

That would still leave payrolls nearly 17 million below their pre-COVID-19 level. The jobless rate is forecast dipping to 12.3% from 13.3% in May.

The Conference Board survey showed the percentage of consumers expecting an increase in income in the short term climbed to 15.1% this month from 14.6% in May and the proportion anticipating a drop fell to 14.4% from 15.4%.

Manufacturing is also stabilizing with a separate report on Tuesday showing a steady pick-up in factory activity in the Midwest. The MNI Indicators’ Chicago Business Barometer rose to a reading of 36.6 in June from 32.3 in May.

Activity in the second quarter, however, slipped 11.8 points to 34.8, the lowest level since Q1 2009.

“The data are signaling a much slower pace of contraction in manufacturing,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York. “However, new flare-ups in virus cases across states, if they are not contained, pose a downside risk to both activity and output.”

A third report showed the S&P CoreLogic Case-Shiller 20-metro-area house price index increased 4.0% from a year ago in April after rising 3.9% in March.

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Business

U.S. consumer confidence rebounds in June, but rising COVID-19 infections a worry

WASHINGTON (Reuters) – U.S. consumer confidence grew more than expected in June, strengthening views that the economic downturn was likely over, though rising COVID-19 infections threatened to derail the budding recovery.

The Conference Board said on Tuesday its consumer confidence index rose to a reading of 98.1 this month from a downwardly revised 85.9 in May. Still, confidence remains 34.5 points below its pre-pandemic level. Economists polled by Reuters had forecast the index would rise to 91.8 in June.

“Consumers are less pessimistic about the short-term outlook, but do not foresee a significant pickup in economic activity,” said Lynn Franco, senior director of economic indicators at The Conference Board.

“Faced with an uncertain and uneven path to recovery, and a potential COVID-19 resurgence, it’s too soon to say that consumers have turned the corner and are ready to begin spending at pre-pandemic levels.”

The survey’s present situation measure, based on consumers’ assessment of current business and labor market conditions, jumped to a reading of 86.2 this month from 68.4 in May.

The expectations index based on consumers’ short-term outlook for income, business and labor market conditions jumped to 106.0 from a reading of 97.6 in May.

The percentage of consumers expecting an increase in income climbed to 15.1% this month from 14.6% in May and the proportion anticipating a drop fell to 14.4% from 15.4%.

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Economy

IMF economic forecasts more pessimistic than Saudi Arabia's – c.bank governor

DUBAI, June 30 (Reuters) – Saudi Arabia’s central bank governor said the International Monetary Fund’s economic contraction forecast for Saudi Arabia was “more pessimistic” than Saudi Arabia’s own forecasts.

The IMF has estimated the Saudi economy will contract by 6.8% this year.

Saudi Arabia’s non-oil economy is expected to bounce back quickly as coronavirus restrictions are lifted, Saudi Arabian Monetary Authority (SAMA) Governor Ahmed al-Kholifey said, without providing a number.

He was speaking at a virtual economic forum. (Reporting by Davide Barbuscia, Marwa Rashad; Editing by Alex Richardson)

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