What to expect from the June jobs report: Economists

June jobs data is more uncertain than normal after May's stronger-than-expected gains. Michelle Girard, chief U.S. economist at NatWest markets, and Kathy Bostjancic, chief U.S. economist at Oxford Economics, join "Squawk Box" to discuss what they expect from the report. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Nonfarm payrolls soared by 4.8 million in June and the unemployment rate fell to 11.1% as the U.S. continued its reopening from the coronavirus pandemic, the Labor Department said Thursday.

Economists surveyed by Dow Jones had been expecting a 2.9 million increase and a jobless rate of 12.4%. The report was released a day earlier than usual due to the July Fourth holiday.

The jobs growth marked a big leap from the 2.7 million in May, which was revised up by 190,000. The June total is easily the largest single-month gain in U.S. history.

“Today’s announcement proves that our economy is roaring back. It’s coming back extremely strong,” President Donald Trump said in a news conference about an hour after the numbers were released. He pointed specifically to a sharp drop in the unemployment for Blacks that fell from 16.8% to 15.4%. “These are historic numbers.”

The numbers capture the move by all 50 states to get activity moving again after the virus seized up much of the U.S., particularly service-related industries.

Wall Street reacted positively to the report, with futures indicating a more than 400-point gain at the open.

However, because the government survey comes from the middle of the month, it does not account for the suspension or rollbacks in regions hit by a resurgence in coronavirus cases.

“The 4.8 million rise in non-farm payrolls in June provides further confirmation that the initial economic rebound has been far faster than we and most others anticipated,” said Michael Pearce, senior U.S. economist at Capital Economics. “But that still leaves employment 9.6% below its February level and with the spread of the virus accelerating again, we expect the recovery from here will be a lot bumpier and job gains far slower on average.”

Indeed, new jobless claims remained stubbornly high last week, with another 1.427 million Americans filing, above the estimate of 1.38 million, the Labor Department said in a separate report Thursday. Continuing claims actually increased by 59,000 to 19.3 million, highlighting the jobless problem likely exacerbated by the ongoing presence of the virus and its economic impact.

“This slowdown is going to have an impact, absolutely. How big is hard to say,” said Steve Blitz, chief U.S. economist at TS Lombard. “There are a lot of unknowns, and it would be silly on the fiscal side to pull back now on stimulus.”

Citigroup economists

Leisure and hospitality again accounted for the biggest jump, as the sector saw a 2.1 million gain, accounting for about 40% of the total growth.

Another big contributor to the decline of the jobless rate was a plunge in those on temporary layoff. That total fell by 4.8 million in June to 10.6 million after a decrease of 2.7 million in May. The short-term jobless level fell by 1 million to 2.8 million.

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