The June Employment Situation
report, released on July 2, showed a continued decline in the
unemployment rate. Thanks to coronavirus, the rate shot up to 14.7
percent in April and declined to 11.1 percent in June. About 4.8
million more people were on payrolls in June than in May. Just about
every sector of the economy saw job gains, including the troubled
leisure snd hospitality industries. The Council of Economic Advisors
says this employment report “shatters expectations". It
represents progress in the recovery from the corona-generated
recession, but I'm not sure what expectations have been shattered.
This administration has been bragging about economic strength even
when there was none.
not yet time to throw a victory party, though. We still have a jobs
deficit of about 15 million jobs, which means that while 7.5 million
jobs were added in April and May, 22 million jobs were lost in March.
If the economy continues to reopen, we might erase the jobs deficit
by October or November at the rate we are going. But the economy
CAN'T continue to open as it has. In some places, it is closing, with
restrictions reimposed. Some cities have introduced curfews. Others
have closed bars. Still others are strictly imposing social
distancing. Some beaches in Florida and California are closed in
response to climbing virus numbers. And in early July, the daily
number of positive tests is climbing. Dr. Anthony Fauci, the
plain-talking infectious disease expert, says we may soon see 100,000
new cases per day, up from 50,000 plus in late June.
know that the President considers himself a “cheerleader”
for the economy, but you can’t cheerlead your way into economic
prosperity. If 45 wants to cheerlead anything, he might try
cheerleading social distancing or mask-wearing. Our inability to
control COVID-19 and the lack of a vaccine will slow, not quicken,
the employment report mostly showed improvement, the official
unemployment rate does not include people working part-time who want
full-time work, discouraged workers (who have stopped looking for
work because they don't think they can find it), and others
considered "marginally attached to the labor force." Add
these to "official" unemployment, and the rate soars from
11.1 to 18 percent. And the Black unemployment rate, reported at 15.4
percent, shoots up to 24.9 percent. Is this really cause for
celebration and superlative language?
Federal Reserve Board has urged caution and does not see economic
recovery anytime soon. They project a 9.3 percent unemployment rate
by the end of this year, and a 6.5 percent rate by the end of 2021.
The Congressional Budget Office has made similar projections, noting
that some jobs just won't come back, causing long-term problems.
should use this information to strengthen the economy through
spending and to bolster up cities and states that have laid off
employees because they are collecting less tax revenue. Some in the
Senate balked at further bailouts, but pushing states into bankruptcy
does not serve our nation's economic stability. Then again, neither
is the head-in-the-sand approach to the coronavirus healthy for the
economy. The coronavirus is not a state rights issue, and it doesn't
stop at any border, but the variation in state policies is partly
responsible for the increased spread of the virus.
decline in the unemployment rate is a positive development as the
economy moves toward recovery. But it is hardly cause for irrational
optimism or celebration. And a healthy stock market is beneficial to
stockholders, and fewer than half of all Americans hold stock.
of the employment conversation addresses low-wage workers, poverty,
the failure of some employers to provide sick days, and health care
challenges. In focusing on the aggregate, we miss the circumstances
that many citizens face. Even before corona hit, one in ten Americans
and one in five African Americans were poor. Mor than 40 percent of
us could not absorb a $400 emergency. If you are crowing about the
“spectacular” economy, why not take a minute to
acknowledge those who do not enjoy it?
"thriving" economy is an illusion. It's doing better, but
we're not there yet. Now is not the time for a victory lap. It is
overtime for dealing with issues of inequality.