The unemployment rate is falling, but more people lose their jobs permanently
Nowadays, reading monthly work reports is like opening a time capsule. According to the data in June, Released todaySince the middle of last month, the economy recovering from the COVID-19 recession is still at a low ebb. At that time, two investigations that formed the backbone of the report were conducted. The unemployment rate fell from 13.3% in May to 11.1% in June, and the number of employed people in June increased by 4.8 million from May.
These numbers look promising-but remember, they are just a snapshot of the economic situation in mid-June.one left a lot of That has changed since then.Most importantly, COVID-19 infection States across the country have soared, Many governors have Rollback reopened in phases Many unemployed workers returned to the labor force. This could have a huge impact on economic sectors, such as leisure and hospitality, which achieved the greatest gains in June.
Even below the surface of the June report, there are signs that the recession is deepening. Crucially, the number of workers who have lost their jobs permanently has increased a lot-which shows that returning to work is no easy task for more and more Americans.And the unemployment rate of white Americans continues to stay at a lot of Lower than the unemployment rate for blacks, Hispanics or Asian Americans.This is an important reminder that some workers are Continue to do better than others As the call for recovery is getting louder and louder.
If you only focus on the headline figures of the report-unemployment rate and number of payroll jobs-the country’s economic situation in June is improving. In fact, the decline in the unemployment rate may even exceed the magnitude indicated by the top-line figures. In the past few months, the Bureau of Labor Statistics has been struggling to deal with a problem unique to our pandemic era: a large number of workers reported that they did not work for the entire week mentioned in the survey because of “other reasons.” This may mean that they are temporarily unemployed due to COVID-19, but they are not counted as unemployed.
What needs to be clear is: BLS has always been very transparent about the existence of this problem. do Is not Means the numbers are fabricated. Our method of measuring unemployment was not designed at all for the recession caused by the pandemic.But it is important to take into account the problem of misclassification, because if these workers have been included in April, the BLS estimates the unemployment rate Could have been About 20%; in May, the rate Could have been About 16%. By June, the U.S. Bureau of Labor Statistics reported that most of its misclassification problems were under control, which meant that the actual unemployment rate had fallen even more, to about 12%.
But remember, we still have one long The way to go before we get close to the pre-pandemic unemployment rate. It all depends on your frame of reference: compared to the unemployment rate in April, the unemployment rate was 11.1%, which is surprisingly low, and the unemployment rate in April was close to 20%.But this is Still higher than at any time in modern history -Including the unemployment rate at the top of the Great Depression.
And there are many reasons to believe that the recovery may stagnate or even regress in the next few months. The June report hides a clue: Among those who are unemployed, the permanent proportion is larger than in previous months.
The U.S. Bureau of Labor Statistics classified 88.6% of the unemployed as “temporary” in April and May, which is in line with the early theme of this recession: businesses temporarily shut down to prevent the spread of COVID-19, but plans to do so after the virus spread Later reopening is under control-especially with the help of government loans, such as Salary protection plan, Which motivates small businesses to keep employees on the payroll during the shutdown period. But in June, the temporary unemployment rate dropped to 78.6%, indicating that when the crisis is over, more and more workers will have no jobs waiting for them.
“As more and more jobs disappear forever, this recession will become more and more like a normal recession. In recent history, recovery has been a slow pace,” Nick Bunker, Director of North American Economic Research at Indeed Hiring Lab (Nick Bunker) said. , Is a research institution that is indeed related to job search websites. “This means that the hope of a quick recovery will become increasingly slim.”
The fact that some industries suffered the most in the early stages of the recession achieved fruitful results in June. This is both good news and bad news. The leisure and hospitality industry lost 8.3 million jobs in March and April, and on the basis of the increase in May, another 2.1 million workers were added in June, an increase of nearly 21% from the previous month. Similarly, the retail industry lost 2.4 million jobs in March and April, and rebounded about 740,000 new workers in June, an increase of 5.4% from the previous month. Education and health services are the other worst-affected industry (2.8 million jobs were lost in March and April), and 568,000 jobs were added in June, an increase of 2.6% from the previous month.
Overall, almost every major industry sector of the economy increased employment opportunities in June, and total private employment has increased by 4.3% since May. However, it is worth noting that although the employment reports in May and June were better than expected, the total number of private employment still fell by 10.2% from the level before the crisis in February. The situation looks better, but there is still a lot of room for improvement.
The hammer may once again fall into industries such as leisure and hotels, including the catering industry.Allow several states restaurant and even Bar with Playground Reopened with partial capacity in May and June-only Shut them off suddenly once again When the number of cases started to soar. This means that some workers who eventually return to work as servers, bartenders or blackjack dealers are likely to be unemployed again in the July report.
Everything is constantly changing these days, and it is difficult for even the most experienced experts to read the report. Erica Groshen, who was a commissioner of the US Bureau of Labor Statistics (BLS) from 2013 to 2017, said that it is extremely difficult to find out the influence of the many different forces churning under the report. She said: “We have cross-used all these influences.” “We have implemented continuous restrictions. We will remove certain restrictions. Moreover, the economic recession itself is deepening.” She said that all of this makes it very difficult. It is difficult to accurately assess what is happening below the surface-even less is what will happen next.
Once again, the benefits are not evenly distributed across the population-this is another topic Very unequal decline. Although the unemployment rate of women fell faster (2.8 percentage points) than men (1.6) in June, the overall unemployment rate of women was still higher than that of men. Similarly, the unemployment rate for white Americans fell by 2.3 percentage points last month, while the unemployment rate for black Americans and Asian Americans fell by only 1.4%. The unemployment rate of black Americans is still the highest among all races or ethnic groups, at 15.4%, which is 5.3 percentage points higher than that of whites.
Perhaps the encouraging data in this job report is that the unemployment rate among Latin American or Hispanic Americans has indeed fallen a lot, with a drop of 3.1 percentage points in June. However, this still keeps their overall unemployment rate at 14.5%, which is not only much higher than the level before the beginning of the coronavirus recession (4.4% in February), but also higher than the unemployment rate for whites (10.1%) or Asians. (13.8%) Americans.
As We often say In this crisis, you really need Next The job report is to explain the current report. The report in June showed that the unexpected employment growth in May was not a rage building-the economy did indeed recover earlier than the economy, and began to recover faster. Many economists expect. But next month’s report may be a wake-up call to remind people of how fragile any economic gains are—at least while the virus is still spiraling out of control in many parts of the United States. Therefore, we will have a better understanding of whether the relevant trends in this report have deepened before next month, and the extent to which the recent COVID-19 outbreaks across the country have hindered the recovery of the newborn.in Typical fashion, Our economic data is moving much slower than the virus, which makes us guess where we might go next.
Correction (July 2, 2020, 4:45 pm): An earlier version of the permanent layoffs chart in this article incorrectly marked the number of layoffs as thousands, when it should have been millions of layoffs.