What to Make of the Rebound in the U.S. Jobs Report

From today’s New York Times:

The job market halted its pandemic-induced collapse in May as employers brought back millions of workers and the unemployment rate unexpectedly declined. Tens of millions are still out of work, and the unemployment rate, which fell to 13.3 percent from 14.7 percent in April, remains worse than in any previous postwar recession. The rate would have been higher had it not been for data-collection issues.

Nonetheless, after weeks of data depicting enormous economic destruction, Friday’s report from the Labor Department offered a glimmer of hope. Employers added 2.5 million jobs in May, defying economists’ expectations of further losses and holding the prospect that the rebound from the economic crisis could be faster than forecast.

Job growth was concentrated in industries hit hardest early in the crisis, like leisure, hospitality and retail work. But manufacturing, health care and professional services added jobs as well, possibly signaling that the damage did not spread as deeply into the economy as many feared. Major stock indexes surged on the news, and President Trump hailed the report in remarks outside the White House, saying the rebound “leads us onto a long period of growth.”

“We will go back to having the greatest economy anywhere in the world, nothing close, and I think we’re going to have a very good upcoming few months,” Mr. Trump said.

All the same, economists warn that it will take far longer for the economy to climb out of the hole than it did to fall into it. And even as the economy shows signs of revival, the United States is confirming more than 20,000 new coronavirus cases a day, with counts rising in particular in the South and the West.

While employers recalled temporarily laid-off or furloughed workers in May, the number of permanent job losses rose, a sign that some businesses didn’t survive the shutdown, or expect demand to stay depressed as the economy reopens. Others are bringing back workers at reduced hours: The number of people working part time because they couldn’t find full-time work barely budged. And millions more people have been laid off in the weeks since the data released Friday was collected in mid-May.

Read the complete article here.