June 10, 2020
Unexpectedly, the job data for May did not show a worsening of the recession. Compared to the 13 percent loss of jobs in April (from the same month a year ago), the loss in May was 12 percent. This isn’t an improvement, or even a difference, but most people (me too) expected the May loss to be closer to 20 percent.
That’s what the weekly claim filings for unemployment suggested. Data for employment and unemployment, however, come from different sources. Employment numbers come from surveys of employers (“How many people were on your payroll on May 15.”), while unemployment numbers come from surveys of individuals. Both surveys have trouble counting people who don’t work full-time or who don’t have ‘regular’ jobs — a growing portion of the population.
Even assuming the true job loss is more than reported, the good news is that this is probably the bottom. How quickly the economy recovers those lost jobs is now the big question. It’s almost certain that some of them will never come back, especially because many are at restaurants that will have to permanently change how they operate. And further job losses will probably come in the government sector, where sharply tighter budgets will be the norm for years.
The job situation in May (compared to May of last year): Losses in all sectors. 12 percent overall. 9 percent in manufacturing, 12 percent in retail, just 2 percent in finance, 9 percent in business services, 6 percent in healthcare, 37 percent at restaurants, and 6 percent in government.