Terry H. Schwadron
June 7, 2020
Those jobs reports we hear once a month are replete with politics, of course, and they reflect estimates from representative industries and a household survey.
So, they are never exact. But over time, they show trends — and exaggerated exceptions — and Friday’s was a doozy, reporting a sudden and unexpected explosion of 2.5 million jobs filled in May.
Donald Trump was quick to gleefully credit himself, and to declare this the beginning of a “rocket ship” return to the Best Economy Ever. He made clear this was evidence to vote for him in November, even if has no control or influence over hiring.
Of course, he went and ruined it by linking the memory of police murder victim George Floyd to the jobs report, bizarrely saying Floyd would see the development as the best of news. Apart from all else, the jobs seem to have gone to whites rather than blacks, for whom jobless rates slightly rose.
But neither the president nor White House economists really explained why their estimates of an additional 9 million jobless were off — by 11.5 million, jobs — and in the opposite direction.
Indeed, the Bureau of Labor Statistics later issued an apology for saying the jobless rate had officially dropped to 13.3% from 14.7%. Actually, BLS said, as a result of misclassifying a trough of workers “absent from their employment,” the effective jobless rate should have increased to 16.3%.
Whatever the percentage, things are still bad, and it is inappropriate for Trump to be celebrating a statistical, if incomplete victory. Still, 2.5 million people returned to work in one month, and that is exceptionally good.
Naturally, this is one month’s record, and flawed at that, coming after a period of government investment and pent-up demand. The BLS measures after the fact, and does not look ahead. For Trump or anyone to make predictive statements based on this month’s data is unreliable — especially since no one saw this month’s results coming.
As usual, we’re left with a half-full, half-empty situation; all we really know is that one month’s data is not enough to see a trend. But don’t let that stop the politics.
Where are the Jobs
If you look at the actual bls.gov report, it is helpful to point where the jobs are, but it does not explain the role of the huge Congressional spending bills to individuals, states and small businesses. Those small business loans were predicated on the idea that the receiving companies would hold jobs for their workers.
So, a certain proportion of the returning workers have come back to their old positions as soon as coronavirus orders have allowed — as required under the legislation.
Democrats are going to take the data as validation for spending to keep jobs reserved; Republicans are going to look at the same information and say, see, we don’t need more stimulus.
A healthy chunk of jobs seems to be as the result of necessary services that were delayed. The great bulk of 312,000 health jobs added in May were in dentist offices, with more in doctor offices. By far, the biggest increase in jobs was 1.2 million in leisure and hospitality jobs, a reflection of pent-up desire to get out of the house after pandemic lockdowns and anticipation of summer vacation spending — whether permitted under coronavirus guidelines or not.
As it turns out, the number of persons who usually work full time increased by 2.2 million to 116.5 million — so well under 2% — but the number who usually work part time rose by 1.6 million to 20.7 million. Part-time workers accounted for about two-fifths of the employment growth over April.
In other words, before we go celebrating, let’s understand that many returned to jobs that are now part-time. The BLS said these individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. This group includes persons who usually work full time and persons who usually work part time.
The important thing is that since February, the unemployment rate and the number of unemployed persons are up by 9.8 percentage points and 15.2 million, respectively. Unemployment rates declined for men, women, Whites and Latinos, but not for teenagers and Blacks. BLS doesn’t report out regions, which varied in stay-at-home orders.
Generally, the new jobs were in leisure and hospitality, food services and drinking places, construction, education and health services, and retail trade. But we don’t know if those jobs were “new” altogether or new since the previous month, when they all were awful. Employment increased in the social assistance industry, including childcare facilities, and family services and private education.
Returning construction jobs counted for about half those lost in April. There were gains in manufacturing (mostly cars) and retail only by comparison with April.
Job losses continued in nursing and residential care facilities and hospitals. And government jobs declined mostly in local government, as well as transportation and warehousing.
None of this measures the loss of employer-paid health care or the increased mental and emotional health pressures. It doesn’t measure the growing food bank lines or pending apartment evictions. It does little to shed light on the disproportionate pressure on black and brown communities, making Trump’s George Floyd reference flippant and disrespectful.
When you hear politicians starting to crow about employment figures over which they had little control, take it with a healthy grain of salt. There is no guarantee that these May figures guarantee anything,