Possibly because of the long weekend and possibly because the unemployment numbers don’t make Donald Trump look bad, there hasn’t been as much commentary as I had expected on the June unemployment numbers.
Here’s mine: They are fantastic!
Here’s the BLS release.
Now for some highlights.
Nonfarm payroll employment rose by 4.8 million in June. I’m not sure but I’m pretty sure that this is a record increase. The previous, month, May, it was a whopping 2.5 million. So June’s number is almost double May’s increase.
The unemployment rate fell from 13.3 percent in May to 11.1 percent in June, a drop of 2.2 percentage points.
The number of people unemployed fell by a whopping 3.2 million. I think that’s a record drop also.
The labor force participation rate rose by 0.7 percentage point.
The employment to population ratio rose by 1.8 percentage points.
In thinking that the major recovery would not start until the added $600 per week federal unemployment ended (it ends at the end of July), I was too pessimistic.
I do think, though, that if Congress had not passed that benefit in March and had Donald Trump not signed the legislation, the unemployment rate today would be in high single digits, not low double digits.
READER COMMENTS
Robert Rounthwaite
Jul 3 2020 at 4:53pm
What do you think about the fact that 7.5 million people went from having a job to not having a job during that same time frame? It seems that there are many jobs still being lost — a spectacular amount of churn is going on. Does that read as good bad or indifferent? Source: NPR “The Indicator” https://pca.st/episode/b6075aae-9671-4835-9e43-e5e4e6074871?t=306
marcus nunes
Jul 3 2020 at 6:58pm
David. Great headline numbers, but this crisis around the significance of those numbers is not so clear!
https://thefaintofheart.wordpress.com/2020/07/03/the-usefulness-of-underlying-or-core-rates/
P Burgos
Jul 3 2020 at 8:21pm
“The employment to population ratio rose by 1.8 percentage points.”
That’s the most important number to look at in terms of the state of the labor market, in my opinion. In January it was at 61.1%. Now it is at 54.6%. So we still have a very long ways to go, and I doubt that future months will be have as much job growth as this, barring an unexpected new and effecting treatment for the new coronavirus.
Alan Goldhammer
Jul 4 2020 at 7:56am
I hope your optimism holds. Unfortunately, I do not think it will. The numbers that have been reported by BLS have been squishy for every month since the pandemic has taken hold. They also do not reflect the recent huge uptick in COVID-19 cases. Some states have now backtracked on opening up. I continue to believe that we will see a large number of business closings, particularly in the hospitality industry. Several large airlines have announce large staff layoffs because of decreased travel. Lots of businesses will not be going back to 100% in office work in the near future which has big implications for commercial real estate and associated services.
Even if we get back to 90% of where the economy was in January at the end of this year, it is still pretty much of a disaster. I suspect we are in a wave recovery rather than a quick rebound.
I found this Washington Post interview with a number of health experts useful in looking at reopening risks. Ask yourself whether you are ready to get on an airplane or visit a restaurant for a sit down meal inside. A large segment of the population with disposable income are not. I’ve gone to pick up meals at some of our favorite restaurants that are now open for indoor dining. I have not seen anyone inside when I have gone in. that speaks volumes for the present moment.
robc
Jul 4 2020 at 12:04pm
I have eaten inside at restaurants a few times in the last 2 weeks.
**Shrug**
While cases goes up, deaths continue to decline. I can see 3 possibilities, any or all could be true:
The virus has mutated to a less dangerous form.
The people getting it now are more healthy, on average
Testing has changed.
There could be other possibilities to explain it, but those seem the big 3.
Jon Murphy
Jul 4 2020 at 12:34pm
None of those are mutually exclusive. Certainly, the number of tests has changed, and once we adjust for that, the new case numbers aren’t nearly as large. It is possible the virus is mutating like many other virus to become less deadly but more infectious
Alan Goldhammer
Jul 4 2020 at 1:33pm
My wife and I are in good health but in the senior citizen age category which puts us at risk. I don’t know of any friends who are prepared to go to an eat in restaurant at this point in time. Similarly we are not going to set foot on a airplane right now. This is a significant part of the economy that is not spending money. I do tip 20% when I pick up dinner at a restaurant to show solidarity. However, I doubt these places will be able to make rent payments if inside patronage does not pick up.
MIchael
Jul 5 2020 at 1:32am
Learning curves are central to human life in all areas, including health and the economy.
Two major factors explaining (in part) the two-months-long continued decline in U.S. deaths from the novel coronavirus, despite the recent increase in (mostly mild or asymptomatic) infections are:
1) The learning curve, after several months of practice, among doctors, nurses, hospitals and scientists in what works (and what doesn’t) to treat people whose infections are serious enough to require hospitalization.
Among the strategies they now use regularly: treating the infected, as soon as symptoms develop, especially shortness of breath, with anti-inflammatory drugs (there are several that studies show are effective) and anti-clotting drugs, and if needed because of lung/breathing distress, putting patients in the “prone position” (on their stomaches, which helps them breath better/easier.
2) The learning curve, as more is learned about this new and fast-spreading (because largely invisible and maybe 40-50 percent of cases are asymptomatic), by those who are at highest risk (like me).
Not just the old – because correlation is not causality – but anyone (which means much more often the old) who have poor health, lower immunity and specific co-morbidities (especially obesity, which causes more diabetes, hypertension, heart disease, cancer, arthritis, etc. – many of which spark greater inflammation, which is especially deadly when combined with the inflammatory “cytokine storm” sparked by this virus.
People like that – like me – are learning to stay home and isolate more, and go out very very rarely (and when we do, briefly and wearing masks and maintaining social separation of more than 6 feet; 10 feet is better).
As a result, those most likely to die are mostly not part of the June/July delayed “first wave” hitting states like Arizona, Texas, California and Florida. Meanwhile, the very young – who tend to believe they are immortal- have been going to bars and parties more, and/or going to protests in recent weeks, where maybe only half are wearing masks and few are socially separating. So that’s why the average age of those “infected” (but very very few dying) has dropped by several decades in just a few weeks.
Nor is it completely foolish for the very young – if they are very healthy, and have regularly gotten health checkups to make sure they don’t suffer from such undiagnosed “silent killers” as diabetes and hypertension, etc. – to be getting out more, albeit with proper precautions.
It actually helps move the world closer to enough herd immunity – which may be closer than we think, at a lower percentage of the population than expected; check out Reason magazine reason.org for a recent story about this – to significantly reduce further spread this fall/winter, while more treatments and the first vaccines are developed.
As usual, the people (doctors and potential patients) have been to a large extent ahead of the so-called political leaders and government mandates in taking rational and prudent steps to safeguard our lives and families.
Matthias Görgens
Jul 13 2020 at 12:56am
For unemployment, it’s more important that the Fed keeps up nominal GDP than any particular avenue people with disposable income have of spending.
Nominal wages are paid out of nominal spending after all.
(For real GDP and thus real incomes the real factors like whether people feel comfortable eating in restaurants matter. But that’s a different topic.)
Jon Murphy
Jul 4 2020 at 10:08am
I think Alan Goldhammer just above me brings up important points. I agree the final shoe has not dropped regarding unemployment; a lot of furloughs will likely translate to layoffs in the coming months. Further, if governments keep reacting to COVID with these lockdowns, we’re going to have a lot more employment problems.
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