Payrolls rose +1.8 million, and the unemployment rate is down from 11.1% to 10.2%.
The economy is still in a massive hole, but we're crawling back out. The problem is that the pace of improvement has slowed to a crawl.
The economy is still in a massive hole, but we're crawling back out. The problem is that the pace of improvement has slowed to a crawl.
Some context on today's payrolls report:
March -1.3 million
April -20.8 million!
May +2.7 million
June +4.8 million
July +1.8 million
We lost 22 million jobs at the outset of this thing.
We've since recovered 9 million jobs.
More than half of the dramatic job loss remains.
March -1.3 million
April -20.8 million!
May +2.7 million
June +4.8 million
July +1.8 million
We lost 22 million jobs at the outset of this thing.
We've since recovered 9 million jobs.
More than half of the dramatic job loss remains.
Today's unemployment rate of 10.2% is higher than at any point during the financial crisis.
Once you account for a technical misclassification problem (see notes below), unemployment is probably closer to 11%, which is the highest rate since the Great Depression.
Once you account for a technical misclassification problem (see notes below), unemployment is probably closer to 11%, which is the highest rate since the Great Depression.
There are three lenses to look at the state of the economy right now:
In levels: It's terrible, probably worse than at any point in the post-war period.
In changes: It's recovering, and doing so at historically rapid rates.
Second derivative: The recovery is stalling.
In levels: It's terrible, probably worse than at any point in the post-war period.
In changes: It's recovering, and doing so at historically rapid rates.
Second derivative: The recovery is stalling.
There are a lot of things you can call this, but it ain't a V.
My concern is that the longer this drags out, the more that "temporary" layoffs become permanent, and what should have been a brief shutdown has longer-run consequences.
My concern is that the longer this drags out, the more that "temporary" layoffs become permanent, and what should have been a brief shutdown has longer-run consequences.
This payrolls report is from 3 weeks ago when new covid cases were still rising.
Some of the real-time indicators that we've seen since (Census Pulse, consumer spending, ongoing jobless claims) have continued to move sideways or down.
We need to beat the bug to truly recover.
Some of the real-time indicators that we've seen since (Census Pulse, consumer spending, ongoing jobless claims) have continued to move sideways or down.
We need to beat the bug to truly recover.
Here's the truly good news in this jobs report -- the decline in unemployment wasn't just about temporary layoffs ending. Permanent unemployment actually fell a smidge.
We'll need a lot more of this in order to return to normal.
We'll need a lot more of this in order to return to normal.
Betsey remains obsessed with dentists.
Why? It's a simple indicator of the effects of the temporary virus-related suppression on the labor market. Dentists all shut down for a while, and how they're nearly all back as they work through the backlog.
Why? It's a simple indicator of the effects of the temporary virus-related suppression on the labor market. Dentists all shut down for a while, and how they're nearly all back as they work through the backlog.
Three summaries of today's jobs report that are all true:
1. The economy is bad.
2. The economy is recovering.
3. The recovery is stalling.
And all of this is so dramatic that it's a post-war record level of bad, a post-war record rate of recovery, and a post-war record stall.
1. The economy is bad.
2. The economy is recovering.
3. The recovery is stalling.
And all of this is so dramatic that it's a post-war record level of bad, a post-war record rate of recovery, and a post-war record stall.
Want to know how the economic recovery will proceed?
That's easy. It all depends on the virus.
Rapid suppression => Resume a rapid recovery.
Ongoing muddling => Tepid recovery.
Rising covid risks => The recovery ends.
That's easy. It all depends on the virus.
Rapid suppression => Resume a rapid recovery.
Ongoing muddling => Tepid recovery.
Rising covid risks => The recovery ends.
This worries me.
And with unemployment at a post-war high, and most of the emergency income support having just expired, Congress can't get anything done, and they've all left town.
They've agreed to touch base by phone to see whether it's worth continuing negotiations.
nytimes.com/2020/08/06/bus…
They've agreed to touch base by phone to see whether it's worth continuing negotiations.
nytimes.com/2020/08/06/bus…
Our looming labor market problem...
