Some more detailed thoughts on the jobs report, what's driving both headwinds and tailwinds for hiring....

First, up PPP: does the end of the 8 week forgiveness period for the first recipients mean layoffs are happening? Forgiveness period was extended, but if early PPP recipients hired all workers back they might be almost out of forgiveness money by the time the extension happened.

Also the extended period might have led PPP firms to lay off some workers to try to make their forgiveness stretch further. I don't have a number on this, but I think on net PPP effects will be fairly mild negative for June. The bigger headwind from this will be July.

The other negative headwind is continued small business failures. If you closely read the Fed team's ADP paper from BPEA, they actually put a number on this indirectly. https://www.brookings.edu/wp-content/uploads/2020/06/Cajner-et-al-Conference-Draft.pdf

Here is the key figure. Compared to the peak, the increase in re-entering is bigger than the decrease in shut-down. This suggests more businesses continue to flow into the "lock down status", offsetting some who flow out of that status into "re-entering".

How much job loss is that? It's some but not sure how much. I think these failures accounts for a good bit of the continued elevated UI claims.

These two headwinds (PPP layoffs and closing small businesses) will continue to grow, as will the number of unemployment who are permanent job losers. The economy will need more momentum in July to offset this and not see a slower pace of growth. Clock is ticking.