Unemployment report “the biggest positive data shock” for markets in history: El-Erian

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Jobs report in May was “the biggest positive data shock” in history after the Department of Labor announced unemployment rates 13.3% lower than expected, the councilor said on Sunday economic chief of Allianz, Mohamed El-Erian.

“I was very surprised,” El-Erian told Fox News Sunday. “It will go down in history as the biggest positive data shock to the markets and the economy. ”

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“It’s a combination of an incredibly resilient, rebounding economy, the impact of government measures, including the paycheck protection program and finally, maybe some data distortion, so we can’t yet understand it, but it’s certainly good news, ”he said. .

Categorization issues may have caused the unemployment rate to appear lower than it actually is.

The Now Open sign is displayed in a stationery store in Evanston, Illinois, on May 29, 2020. (AP Photo / Nam Y. Huh)

“There is a category that says” staying at home for reasons other than unemployment, “” said El-Erian. “He is supposed to seize the functions of juror. This category has become very important, and if you adjust for it, it represents an additional three percentage points on the unemployment rate. ”

The May data also showed a slight 0.1% increase in black unemployment to 16.8%, highlighting an “inequality of opportunity problem,” said El-Erian.

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“The unemployment rate for blacks has increased much faster than that for whites,” he said. “Data from last Friday indicated to us that while whites have achieved a very large reduction in the unemployment rate, the rate of blacks has increased. … It is really important to focus on this. ”

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