The easy part of economic recovery may be over

Has the economy finally started to rebound?Numbers according to the following headings August work report, It must be that way. The report shows that the economy added 1.4 million jobs in August, and the unemployment rate fell below 10% for the first time since March, to 8.4%, a 1.8 percentage point drop from July.

Good news? Well, when it comes to work reports for this kind of pandemic, appearances can be deceptive. The economy is definitely improving: The August report showed that the labor force participation rate has increased and thousands of workers on leave are returning to work.

However, there are many clues in this month’s report that the growth we are seeing is not as strong as it seems, and that this growth may be unsustainable without major changes to the public health situation:

  • The August phenomenon has nothing to do with the current economic recession. This is the reason for the large number of temporary hiring by the U.S. Census Bureau, which adds to the large number of jobs obtained in August.
  • Employment growth in the private sector is generally slowing down, while the industries hardest hit by the pandemic (such as leisure and hospitality) appear to be stagnating below pre-pandemic peaks.
  • In the next few months, getting people back to work will become increasingly difficult, as more and more unemployed people are permanently unemployed.
  • For some groups, the rate of recovery is faster than others-which means that the unemployment rate of people of color is still much higher than that of white workers.

Trump can thank the census for positive headlines this month

The large amount of credit for better-than-expected employment this month should be attributed to the US Census Bureau.The bureau conducts a recruitment boom every 10 years, bringing thousands of workers to its payroll to Scattered all over the country Months Knock on the door People who have not yet returned to the census form to ensure an accurate count.In a normal year, this sudden recruitment will be very obvious-hundreds of thousands of new government jobs may increase the total number of jobs acquired that month One order of magnitude.

However, the COVID-19 recession has rendered our frame of reference meaningless.because We lost tens of millions of jobs in March and AprilIt doesn’t seem surprising that we can get more than one million jobs in a single month these days. Therefore, the 238,000 increase in population census work in August is not as obvious as usual. Instead, it is quietly filling the total. However, employment of census personnel accounted for 17% of the total number of new non-agricultural jobs in August. More importantly, this rise is very temporary.Most census workers Will be fired When the canvassing of the count ends later this month.

The private sector is not a success story

It is also important to remember that we are still very, very, very deeply stuck in the April dilemma, and employment growth in the private sector is slowing. Although government employment increased by 1.6% from July to August, which was largely driven by employment by the Census Bureau, employment in the private sector increased by only 0.9% during the same period. After an increase of 1.3% in July, this may indicate that private recruitment has reached a plateau. Indeed, the data provided by job search websites confirms this point. The trend of showing work lists is slowing After steady growth at the beginning of summer.

Among the industries most affected by the pandemic, job growth has slowed the fastest, which means it may be particularly difficult for these industries to return to pre-pandemic levels. For example, the leisure and hospitality industry lost a staggering 8.3 million jobs in March and April, but after rapid growth in May and June, the industry only added 621,000 jobs in July and August, compared to Reduced 4.1 million pandemic (February 2020) benchmarks in the previous quarter:

Until the end of summer, basically every major industry in the United States was like this. With the exception of mining and logging, every economic super-industry experienced job growth in August. With the exception of a few, all other economic sectors also increased in June and July. However, compared with February, each of them now has fewer employees. The closest thing to the normal value is public utilities, which is 1.3% lower than before the pandemic. However, the median of super industries has fallen by 6%, and some industries (such as leisure and hospitality) have fallen by as much as 25% from their pre-pandemic levels.

Nick Bunker, head of North American economic research at Indeed Hiring Lab, a research organization linked to the job site Indeed, told us that the slowdown in the leisure and hospitality industry is particularly worrying because it may indicate that it is operating under pandemic conditions. , Troubled industries may run out of new job opportunities.

He said: “For me, this is to figure out when we have come out of the rebound phase and look more like a typical recovery from a recession. Although there is steady growth, there is no surge in employment. “This month’s work figures indicate that we may reach this point, which is very shocking considering that these industries have not yet reached their pre-pandemic peaks.

Permanent problem

One thing economist Afraid of the early summer It’s about to pass: The number of permanently unemployed has increased last month, even though many temporarily unemployed are returning to work. According to BLS, There were temporary layoffs of 9.2 million workers in July, similar to the June figure (10.6 million). However, only 6.2 million people fell into this category in August, which means that 3.1 million workers who were laid off or laid off in other ways have resumed work. That is good news. The bad news is that the number of permanent layoffs has not declined-the number actually increased from 2.9 million in July to 3.4 million in August.

On the one hand, 64% of the unemployed are classified as temporary layoffs, a sharp drop compared to the early stage of the pandemic (90% in April) and more consistent with the pre-crisis figures; for example, the share in February was only 39%.But with unemployment Still high by historical standards, Which also means that for those who are now permanently unemployed, it will become increasingly difficult to find a job. Martha Gimbel, an economist at Schmidt Futures, said: “We are facing a slow-evolving unemployment crisis.” “We see this happened in the last recession-many It took a long time for people to be unemployed before recovering from it.”

The proportion of workers working part-time is also increasing: in August, 17% of those working part-time. In a sense, this is more in line with the “normal” economy. The share in February was 17.5%.but the reason More and more workers are working part-time One of the biggest economic problems of the pandemic: Parenting. When BLS List workers Through full-time or part-time status, they can also track whether the status is due to economic reasons (such as a slowdown in the industry or a weak job market) or non-economic reasons. Currently, 71% of all non-agricultural part-time workers fall into the latter category. One of the biggest non-economic reasons for people seeking or accepting part-time jobs is childcare obligations. We know that even under normal circumstances, about one-third of women who have children and work part-time can do this. Because of the duty of care. Since face-to-face learning in schools in many places is still restricted, it is reasonable to believe that this will lead to a further increase in part-time work just out of necessity.

Recovery does not help everyone equally

At the same time, for some people, the recovery continues faster than others. This month, the unemployment rate for white workers fell to 7.3%, a decrease of 1.9 percentage points from July. But non-ferrous workers are still struggling with higher unemployment rates. Black workers have an unemployment rate of 13%, Asian workers have an unemployment rate of 10.7%, and Hispanic workers have an unemployment rate of 10.5%.

The gap between black and white workers is particularly worrying. Unfortunately, this is normal The unemployment rate of blacks is much higher than that of white workers. This was earlier this year, when things were pretty good, and it was the same during the Great Depression.

Since the beginning of the current economic recession, the unemployment gap between black and white has actually been smaller than it was during the Great Depression, when the unemployment rate for large blacks reached a staggering 16.8% in March 2010, while the unemployment rate for whites was much lower at 8.9%. But this is partly because black workers-especially black women- Often overrepresented Jobs considered essential during the COVID-19 pandemic, which means they may have avoided some significant job losses in April and May.

However, as workers began to be re-employed, Bunker and Kimbell both told us that they hoped that white workers would be recalled sooner because of the employer’s intentional and unintentional. Racial prejudice. Bunker said: “Black workers are often fired first and hired last.” “Unfortunately, this is a factor you see in many recovery-a very strong labor market is needed to reduce the black unemployment rate. Acceptable to other groups.”

For example, this month, the unemployment rate of white women fell by 2.3 points, one of the countries with the largest decline among all demographic groups. But for black women, the decline was much narrower, only 1.3 points.

This gap is disturbing in many ways. First of all, this shows that we are so used to the high unemployment rate of black workers that the current gap is not surprising. Jim Bell said that in addition to ethical considerations, uneven job opportunities may be a drag on the economy.Work discrimination based on race, whether intentional or not, means someone who gets a specific job May not be the most qualified The person in the position. “Then you have to remember that those people are also consumers,” Kimbell said. “They spend money. So if they don’t have enough money to spend, it will also make us back down.”

All of this reminds us that as the economic recovery continues, the headline work figures will not be able to tell us how different groups are experiencing recession. Some industries have rebounded faster than others; some people are more likely to benefit from economic recovery than others. Moreover, if the recovery does start to slow down, then these inequalities may persist for a long time.

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